Sitting Panel: Sh. Riaz Ahmed, C.J., Munir A. Sheikh, Qazi Muhammad Farooq, Dr. Allama Khalid Mahmood and Dr. Rashid Ahmed Jullundhari, JJ

Summary:

This case involved review petitions challenging the Supreme Court’s Shariat Appellate Bench judgment (December 23, 1999) which affirmed the Federal Shariat Court’s ruling declaring Riba (interest) in all forms prohibited by Islam, and consequently, several laws ceased to have effect. The judgment also suggested measures for transforming the banking and economic system to an Islamic one and set deadlines for implementation. Petitioners, including United Bank Ltd. and Muhammad Iqbal Zahid, sought review and suspension/extension of the judgment’s operation, raising objections regarding the scope of Riba, the workability of proposed Islamic finance modes, and the jurisdiction of the Shariat Courts. Objections were also raised regarding the constitutionality of ad hoc members on the Shariat Appellate Bench, which the Court repelled.

The Supreme Court allowed the review petitions, setting aside both the Shariat Appellate Bench and Federal Shariat Court judgments, and remitted the cases to the Federal Shariat Court for a fresh and comprehensive determination. The Court identified “errors floating on the surface of the record,” noting that the Federal Shariat Court had not given definite findings on all essential issues, particularly excluding “Riba-al-Fadl” from its discussion and failing to consider certain juristic opinions. The Supreme Court emphasized the need for “thorough and elaborate research and comparative study of the financial systems which are prevalent in the contemporary Muslim countries” to resolve the complex issues involved. The Federal Shariat Court was granted liberty to consider any other relevant aspects for a just determination of the controversy.

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