The Issue of Dayn and ‘Ayn
From what we have seen it is clear that in order for the fiqh of zakat to be properly applied again and the pillar of zakat restored to its pivotal position at the centre of Muslim society, two main factors must be radically addressed – the necessary link between zakat and Muslim governance and the re-introduction of Dinar and Dirham coinage as a medium of exchange among the Muslims to enable the zakat of monetary wealth to be correctly paid.
A third corollary factor should be added to these two and that is the re-establishment of awqaf among the Muslims. This is partly because zakat is now viewed as charity and used for purposes that have traditionally been undertaken in Muslim society by the establishment of awqaf and partly because the re-establishment of awqaf is absolutely necessary next step beyond the restoration of zakat to the proper functioning of a Muslim society.
Zakat is paid in ‘ayn, not dayn
Zakat in Islam must be paid in ‘ayn, that is tangible merchandise and cannot be paid in dayn, that is, a debt, a liability or a promisory note. This important matter has been ignored for many years appealing to darurah (exceptionality), since the Dinar and Dirham were not available. The fact that the Dinar and Dirham are available again bring this matter forward once again.
Property (mal) is owned (milk) as either ‘ayn or dayn. ‘Ayn is a specific existing thing, considered as unique object and not merely as a member of a category (“this horse”, not “a thoroughbred mare”). Dayn is any property, not an ‘ayn, that a debtor owes, either now or in the future; or it can refer to such property ony when due in the future. Property owned as dayn is usually fungible, such as gold or wheat. Sometimes non-fungible manufactured goods defined by specification are treated as dayn. Although dayn, literally means “debt”, in fiqh it refers not to the “obligation” per se, but rather to the property the subject of the obligation, which is considered to be already owned by the creditor. Clearly, since such property is not yet identified and may not even exist (it is not an ‘ayn), referring to dayn as present property is fictive.
Dayn means wealth, the payment of which attaches as a liability to a legal person (dhimmah), as the result of a transaction (‘aqd) or a loan, or as damages for property destroyed (istihlak). Dayn by extension means the class of goods called mithli (fungible); that is , goods whose price (thaman) in sale is determined on the basis of weight (wazn), or volume (kayl), or number (‘adad), and among the various units of which there is no difference of value due to human art. The definition of dayn given in the Majallah in a way combines these two meanings. According to it, a stated portion of a heap of wheat is dayn before it has been set off. ‘Ayn is the opposite of dayn in the last sense, meaning that is definite and has a bodily existence. Thus, in the above example, the said portion becomes ‘ayn by being set off.
It follows a text of the Great Scholar Imam Abu Bakr al-Kasani (d. 587H) wrote:
“If the property on which zakat fell due is dayn, as distinguished from ‘ayn, its zakat may be settled in terms of ‘ayn wealth. Thus a person having a claim of two hundred dirhams on which zakat is due, may give, in settlement of the same, five dirhams in cash, because dayn as compared with ‘ayn is defective (naqis) and the ‘ayn is complete (kamil), and a settlement of the defective in terms of the complete is valid. On the contrary, the settlement of the complete ‘ayn in terms of the defective is not valid, and therefore, the zakat debt is not discharged if a person wants to pay the zakat of two hundred dirhams which he possesses (i.e. ‘ayn) in terms of the five dirhams which a poor person owes him (i.e. dayn); namely, by absolving him from the debt intending it for his own zakat debt on the two hundred dirhams. Finally, as regards the settlement of the zakat of dayn wealth in terms of dayn wealth, if the wealth on which zakat is due of the kind of dayn which becomes ‘ayn is not valid; otherwise is valid. Thus if a person has five dirhams owed to him by a person and two hundred dirhams by another person, he cannot settle the zakat of the two hundred by making a present of five to the debtor as alms, because the two hundred dirhams will become ‘ayn when collected, and the settlement of the zakat of ‘ayn wealth in terms of dayn is not valid.
An example of the opposite case would be that a person who wanted to settle the zakat of two hundred dirhams owed him by another by making a present of those dirhams to the debtor and intending it for his zakat debt. However, this is allowed only in case of the debtor is a poor person, although there is also a view to the contrary. It goes without saying that the zakat of ‘ayn wealth is discharged if paid in terms of ‘ayn wealth; if, for instance, one pays the zakat of two hundred dirhams he posseses by paying five out of those two hundred.”
Kasani, pp. 42-3. Quoted in Islamic Theories of Finance by Nicolas Aghnides, New York : Columbia University, 1916; pp 334-335.
Dayn and Riba
Riba al-nasiah has been forgotten in the modern interpretation of the fiqh. Riba al-nasiah is an excess in time (delay) artificially added to the transaction. It is an unjustified delay. This refers to the possession (‘ayn) and its non-possession (dayn) of the medium of payment (gold, silver and food stuff -which was used as money). ‘Ayn is tangible merchandise, often is referred as cash. Dayn is a promise of payment or a debt on anything whose delivery or payment is delayed. To exchange (safr) dayn for ‘ayn of the same genus is Riba al-nasiah. To exchange dayn for dayn is also forbidden. In an exchange it is only allowed to exchange ‘ayn for ‘ayn.
This is supported by many hadith on this issue. Imam Malik related:
Yahya related to me from Malik that he had heard that al-Qasim ibn Muhammad said, “‘Umar ibn al-Khattab said, ‘A dinar for a dinar, and a dirham for a dirham, and a sa’ for a sa’. Something to be collected later is not to be sold for something at hand.”
Yahya related to me from Malik that Abu’z-Zinad heard Sa’id al Musayyab say “There is usury only in gold or silver or what is weighed and measured of what is eaten and drunk.”
Imam Al-Kasani wrote:
“As for riba al-nasa’ it is the difference (excess) between the termination of delay and the period of delay and the difference (excess) between the possession (‘ayn) and non-possession in things measured and weighed with different genera as well as in things measured and weighed with the uniformity of genera. This is according to al-Shafi’i (Allah bless him), it is the difference between the termination of the period and the delay in foodstuff and precious metals (with currency-value) specifically.”
Riba al-nasiah refers particularly to the use of dayn in the exchange (sarf) of the same genera. But the prohibition is extended to sales in general when the dayn representing money, overpasses its private nature and replaces the ‘ayn as a medium of payment.
Imam Malik, Allah be merciful to him, illustrates this point in his “al-Muwatta”:
“Yahya related to me from Malik that he had heard that receipts (sukukun) were given to people in the time of Marwan ibn al-Hakam for the produce of the market of al-Jar. People bought and sold the receipts among themselves before they took delivery of the goods. Zayd ibn Thabit, one of the Companions of the Messenger of Allah, may Allah bless him and grant him peace, went to Marwan ibn Hakam and said, “Marwan! Do you make usury halal?” He said, “I seek refuge with Allah! What is that?” He said, “These receipts which people buy and sell before they take delivery of the goods.” Marwan therefore sent guards to follow them and take them from people’s hands and return them to their owners.”
Zayd ibn Thabit, specifically calls riba those receipts (dayn) ‘which people buy and sell before taking delivery of the goods’. It is allowed to use gold and silver or food to make a payment, but you cannot USE the promise of payment. In it there is an excess that is not allowed. If you have dayn, you have to take possession of the ‘ayn it represents and then you can transact. You cannot use the dayn as money.
In general the rule is that you should not sell something which is there, for something which is not. This practice is called Rama’ and it is Riba.
Yahya related to me from Malik from ‘Abdullah ibn Dinar from ‘Abdullah ibn ‘Umar that ‘Umar ibn al-Khattab said: “Do not sell gold for gold except like for like. Do not increase part of it over another part. Do not sell silver for silver except for like, and do not increase part of it over another part. Do not sell some of it which is there for some of it which is not. If someone asks you to wait for payment until he has been to his house, do not leave him. I fear rama’ for you. Rama’ is usury.”
Rama’ is today the common practice in all our markets. Dayn currency (paper money, receipts) has replaced the use of ‘ayn currency (Dinar, Dirham). This practice is what Umar ibn al-Khattab meant when he said “I fear rama’ for you.”
Selling with deferment is not restricted to metals it also includes food. Malik said, “the Messenger of Allah, may Allah bless him and grant him peace, forbade selling food before getting delivery of it”.
Therefore, what is prohibited in Riba al-nasiah, is the addition of an artificial deferment that does not belong to the nature of the transaction. What does ‘arfiticial’ and ‘the nature of the transaction’ mean? It means that every transaction has its own natural conditions of timing and price.