MS Omar Attorney

Attorneys and Conveyancers

Estate Duty Fatwa

December 09, 1996

Mr. Ahmed Chohan
Durban Spice Works
P.o. Box 3748
DURBAN, 4000

Dear Brother Ahmed Saeed Chohan,

As Salamu Alaikum Wa Rahmatullahi Wa Barakatuhu,

First of all I would like to apologize for this inordinate delay in replying to your letter of 27th June,1996, but it was due to my overwhelming engagements and travels. I hope you will ovelook this delay.

Regarding your question about taking an insurance to cover the death it is pertinent to know that initially the transactions of insurance in vogue today are not permissible under Shariah there is an element of either interest or gambling. However, in the given situation of your query where a huge amount of inheritance is apprehended to go to the death duty which is in clear violation of the rules of inheritance laid down by the Holy Quran and Sunnah, taking of insurance to cover the death duty can be accepted as a lesser evil. If the insurance company is owned by the government taking of such insurance is undoubtedly permissible. However, if the insurance company is a private one it can be held as permissible on the ground that depriving the legal heirs of such a huge amount is a greater evil which can be avoided by opting for a lesser evil of insurance. But this permissibility will be subject to the condition that the amounts so recovered from an insurance company can never be availed of for the benefit of the insured or his legal heirs except to the extent of paying off the death duty imposed by the government. Therefore, if after satisfying the death duty there remains some amount it must be given to the people entitled to receive Zakah.

Wa As Salamu Alaikum Wa Rahmatullahi Wa Barakatuhu,
Mohammad Taqi Usmani

The Role of Muslims in the New South Africa

The first democratic elections in this country will take place on the 27, 28 and 29 April 1994 and South Africa will enter a new era of Revolutionary Change. In an effort to free herself from the unjust legacy of apartheid and racial discrimination, no aspect of life will remain unaffected. Fundamental changes will take place at all levels of society in order to redress the inequalities of the past, to improve the quality of life and to achieve social and economic justice.

Against this background, the muslims who constitute a small minority of perhaps close to a million, can play a meaningful and important role at all levels in the new South Africa. Muslims can easily meet the emerging challenges, and march progressively forward, if their vision and practice is shaped by the principles embodied in the Holy Quran and the Prophetic model. The answer lies in the inherent dynamism of Islam, its inherent capacity to express justice in all of human dealings because it’s very teachings are the embodiment of justice and equity.

The Muslim participation in the new South Africa must be at two levels: at the political level, and at grassroots level.

Participation at the political level means full participation in the political process. Participation at the grassroots level means full participation at all levels of South African society in a way that will improve the quality of life, contribute to social and economic justice, and economic growth.

We will deal with each level of participation below.


Muslims must participate fully in the political process. The exercise of the vote is not an end in itself. The vote is the means for the removal and elimination of all vestiges of Apartheid and racial discrimination. The vote is the means of introducing appropriate measures, on the part of a new government, designed to promote the improvement in the quality of life, social upliftment, social justice and economic growth.

The exercise of the vote will confer a legitimacy that will enable the new government to seriously address and tackle the problems of the country in all fields, and to meet the reasonable expectations of the people in a climate of peace and stability. Peace and stability can only be achieved if the real problems - provision of basic amenities, restructuring of education, land reform, etc are addressed. A new government will be in control of valuable resources which must be allocated equitably having regard to priorities and needs within the context of the South African experience.

The Muslims must make an input in the significant policy decisions that will be made by a new government in all fields of life. They cannot remain on the sidelines and become marginalized. By participating fully in the political process they will establish channels of communication by means of which the Muslim viewpoint can be effectively and vigorously put forward in thecorridors of power.

The exercise of the vote has far reaching implications: it signals the end of an era of darkness and despair; it heralds the beginning of an era which promises peace and prosperity for all. The Muslims must use the vote effectively and wisely, for the betterment of all.

Read more: The Role of Muslims in the New South Africa

Shariah Compliance Of Agility Product Offered By Mercedes - Benz Finance Company

13 September 2016


Dear Sir




1.       In terms of the relevant agreement, governing the Agility product, the finance company, as lessor, effectively leases the use of the vehicle, chosen by the customer, for a specified agreed period, at an agreed monthly or periodic rental, linked to the benchmark interest rate, either fixed or variable, as determined by the lessor.

2.       Ownership of the vehicle in terms of clause 19.5 at all material times remains vested in the lessor. Upon expiry of the agreement, the lessor guarantees that the leased vehicle will have the “guaranteed future value”, so disclosed at the inception of the agreement, on the schedule thereto, provided that the lessee has complied with all its obligations under the agreement. (see clause 36).

3.       There are several terms of the agreement, governing the Agility product, which are contrary to the basic principles of a lease, as recognized in the Shariah. It is not necessary to canvass all Shariah issues in this short note, nor do time constraints permit.

4.       However, the important, critical clause in the agreement that goes to the heart of the analysis is the provision governing risk, namely clause 27 which provides as follows :

         “all risk in the vehicle will pass to you from the date on which you sign the          Schedule (page1) or the date on which you obtain possession of the vehicle, whichever comes first”.

5.       It is established Shariah law, across all the mazaaib, that the holding of the lessee is that of trust, and that the risk of damage or destruction of the leased asset at all relevant times , during the lease , remains vested in the lessor. In other words, the lessee is not liable to the lessor for any damage to the vehicle , unless such damage or loss is caused by the negligence of the lessee, or , material breach of contract, or, other misconduct on the part of the lessee.

العين المؤجرة تكون على ضمان الموءجر طيلة 

مدة الاجارة ما لم يقع من المستأجر تعد او تقصير .

AAOIFI Shariah Standard 9

6.       The effect of contractually transferring all the risk in the leased thing, from lessor to lessee, has serious Shariah consequences, and at best renders the transaction invalid (faasid), with the result that normally the market rental applies, in the Hanafi school.

7.       For example, a plain reading of clauses 23.1.4 and 23.1.5 of the agreement, transfers the obligation to maintain the vehicle, including major maintenance associated with ownership, from the lessor to the lessee. This is impermissible. All the schools of law are unanimous that major maintenance upon which the intrinsic utility and operation of the leased asset depends, is the obligation of the lessor, as owner. (as opposed to ordinary minor operational maintenance, such as service, which can be passed on to the lessee).

لا يجوز ان يشترط الموءجر على المستأجر الصيانة الاساسية للعين التي يتوقف عليها بقاء المنفعة.

AAOIFI Shariah Standard 9

8.       Clause 29 provides that in the event of damage to the vehicle, the lessee has the absolute obligation and is strictly liable, under all circumstances, at his or her cost, to “repair and restore the vehicle to its former condition”. Similar provisions apply to the situation, where the vehicle is stolen or otherwise damaged beyond economic repair. This is an impermissible transfer of Shariah risk or damaan to the lessee.

9.       Similarly, clause 8.3.2 of the agreement provides that, in the event of a failure by the lessee to pay any amount due and payable in terms of the agreement, the lessor shall be entitled to claim “the immediate payment of the full outstanding balance in terms of this agreement, irrespective whether or not such amount are due at that time or not.” This is clearly impermissible.

في حالة التنفيذ...... يحق الموءجر ان يستوفي منها ما يتعلق بالأجرة المستحقة للفترات السابقة فقط، و ليس له استيفاء جميع الاقساط الإيجارية بما في ذالك الاقساط التي لم يحل اجلها و لم يقابلها استخدام للمنفعة.

AAOIFI Shariah Standard 

And Allah Knows Best



Specialist Corporate and Shariah Attorney 

For Online Literature



Shariah Treatment Of Disposal Of Insurance Surplus In Respect Of A Takaful Arrangement Based On The Waqf Model

   8 August 2016

Maulana Musa Zuma


Dear Maulana



         Fatwa of Mufti Taqi Usmani

1.       I enclose herewith an extract of the research paper (Waqf model) of the distinguished jurist Mufti Taqi Usmani, relating to the distribution of the surplus. (page 1) : it is to be kept as a reserve, or, otherwise divided into 3 parts : one part retained as a reserve. Another part distributed to the participants to show the fundamental difference between the conventional and Islamic models; and the third portion distributed to charity. No part thereof is allocated to the managing insurance company for the benefit of its shareholders consistent with the standpoint of AAOIFI, which prohibits the distribution of the surplus to the managing company: Shariah Standard 26 : 5/5.


         MaQaasid of the Shariah

2.       There is a cogent argument that, a term or condition in a Waqf, which empowers the trustees to distribute a portion of the surplus to the insurance company, for the ultimate benefit of its shareholders, is an impermissible heelah or stratagem, which is contrary to the overriding objectives of the Shariah, embodied in the Prophetic model of mutual assistance, mutual co-operation, cross-subsidization, and solidarity. (Al Bukhari and Muslim - Hadis on Nahd) In substance, such a provision constitutes a reversion to the conventional model of insurance. (hence, certain Shariah experts commencing from Shaykh Mustafa Al –Zarqa (RA), Shaykh Abdullah Al Mani etc, are of the view that there is no practical real distinction between the conventional and Islamic models of insurance.

         Fatwa of Shakh Guddah

3.       In relation to the opinion of the distinguished jurist Shaykh Abdul Sattar Abu Guddah, I enclose herewith:

3.1     the resolution of the 12th economic conference (1996) of the Dallah Albaraka Group, which states that the surplus is the exclusive right of the Takaful participants. (pages 2 -3);

3.2     the fatwa of the global Unified Shariah Supervisory Board of the Dallah Albaraka Group to the effect that it is impermissible to participate in a profit insurance company (with a share capital) which distributes a portion of its insurance surplus, to its shareholders (pages 4 -5);

3.3     an extract of an article on Takaful written by Shaykh Guddah, to the effect that the surplus is jointly owned by the participants (pages 6 to 7);

3.4     Fataawah on Islamic Insurance relating to the distribution of the surplus (pages 8 to 11). At page 11, Shaykh Guddah states : “the insurance surplus is for the exclusive benefit of the policy holders”; (Takaful Participants)

          Fatwa of Prof Siddiq Al Amin Al Dharir (RA)

3.5     the fatwa of the Shariah Board of Faisal Islamic Bank, Sudan, headed by the distinguished jurist Prof Siddiq Al Amin Al Dharir (RA), the father and founder of Islamic Insurance, in Sudan. He stated at the Global Fiqh Academy debate on Islamic Insurance as follows:

          “The basis of the difference (between conventional and Islamic modes of insurance) is that in the commercial profit insurance arrangement, the managing company itself, shares in the profits and losses of the insurance scheme. On the other hand, in a Takaful arrangement, (based on tabarru) the insurer and the insured is the same person : there is no party in this tabarru insurance arrangement that trades for profit; The participants are the (true) owners of the company : they gain from the profits, if any accrue, or otherwise from the surplus total contributions, after payment of compensation, and such surplus is returned to the participants. The participants incur the loss, if the compensation paid exceeds the aggregate gratuitous contributions of the participants”.

          (my translation from the Arabic : volume 2, page 680 of the record of the proceedings of the Global Fiqh Academy, held in Jeddah on the 22nd to 28th December 1985, on the subject of insurance and re-insurance)

4.       Extract from the books of Shaykh Sameer Shaair, relating to the distribution of the surplus to the Takaful participants, as an increase on their contributions, together with any legitimate growth thereon, after payment of all liabilities, on the basis of enforceable gratuitous obligations, within a tabarru model. (pages 12 to 15)

Incentive To Employees Not To Exceed One-Sixth of Surplus

5.       I have yesterday telephonically clarified with Dr Shaykh Abdul Satar Abu Guddah on the question whether it is permissible to distribute any part of the surplus to the insurer for the ultimate benefit of its shareholders. His opinion is that a maximum of one-sixth may be distributed to only the workers directly employed to administer the Takaful fund, on a waqf model, or otherwise on a tabarru model, if expressly stipulated in the founding deed, purely as an incentive, حافز, to the موظفين workers, but provided that any distribution of any portion of the surplus to the registered managing insurer and its shareholders is prohibited. He also confirms that the surplus belongs to the Takaful participants.


Best Regards


Specialist Corporate and Shariah Attorney

for online literature :

see website:

Guidance Note On Circumstances When Fidyah Is Payable As Expiation Payment, In Respect Of Missed Ramadaan Fasts As A Result Of Illness 

22 June 2016

The correct position in the Hanafi school is as follows:

1. A severely ill person who does not hope to recover at all, and who accordingly cannot fast at any time of the year, and is not expected to ever regain the ability to make up the missed fasts, must by consensus pay the Fidyah, as a substitute in place of the missed fasts. His or her situation of permanent illness is similar to the very elderly who have lost the strength to fast and who progressively become weaker, and who must pay the Fidyah by feeding a poor person for every day that he or she has missed.

المريض اذا تحقق الياس من الصحة فعليه الفدية لكل يوم من المرض ( رد المحتار)

2. On the other hand, a person who missed his or her fast due to an illness from which he or she is expected to recover is obliged to make up the fasts by way of Qada. In this situation of temporary illness, there is no scope for paying Fidyah in accordance with the Quranic verse :

من كان مريضا ( يرجوا شفاء ) ... فَعِدَّة من ايام اخر.

لان فى إيجاب الفدية مع القضاء زيادة فى النص ( الجصاص )

3. In the situation of temporary illness contemplated in paragraph 2 above, if the sick person dies during the illness before recovery, then there is no obligation of Qada in respect of the past missed fasts. On the other hand, if he or she recovers, after the illness, but then whilst in normal health, fails to make Qada , then he or she is obliged to make a wasiyah  directing the executors and heirs to pay Fidyah out of one thirds of one's estate, after payment of debts, as a substitute to make up for the missed fasts.

فان ماتو في ذالك العذر فلا تجب عليهم الوصية بالفدية لعدم ادراكهم عدة من ايام اخر ( الدر المختار)




Guidance Note On Calculation Of Zakah On Jmh Shares: 2016

M.S. Omar/um

8 June 2016

Joint Medical Holdings Limited

Attention: Mr Rafeek Nakooda

Dear Sir


Basic Principles

1. The correct method of calculating Zakah in respect of the shares, owned by a Muslim shareholder, is based on the following Shariah principles:

1.1 ownership of a share in JMH represents a pro rata undivided share in the underlying assets of the company;

1.2 For that purpose, the shareholder must identify and determine the value of the underlying Zakaatable assets, after deducting relevant liabilities, at his or her Zakah valuation date, which is normally Ramadaan.

1.3 Gold, silver, cash, and receivables per se, are subject to Zakah under all circumstances. Any other asset, only constitutes a Zakaatable asset, if such asset was acquired with the primary intention, at the time of purchase, for the purposes of resale, and is therefore deemed to constitute trading stock.

Determination of Zakaatable Value

2. We have examined the consolidated management accounts of JMH as at 30th April 2016, and have determined the following, in consultation with the Group Accounting Services Manager, Mr Rafeek Nakooda:


Inventory (stock) 14 928 547
 Trade and Other Receivables   111 664 477
 Cash and Cash equivalents  46 929 530
 Current Income Tax Asset    12 582 961
Total Value of Zakaatable Assets R186 105 515

Less Relevant Liabilities:


Trade and Other Payables  63 453 416
Bank overdraft (borrowings)   67 123 040
Current Tax Liability due and payable   2 136 709
  R132 713 165


Net Value of Zakaatable Assets as at 30 April 20161 R53 392 350

Zakaatable Value Per Share

3. The Zakaatable value per issued share is R0.17 determined as follows:

Net Zakaatable Value
total number of issued shares

R53 392 350
311 736 900

= R0.17 per share


4. For example, if a shareholder owns 1 000 000 ordinary shares on his or her Zakah valuation date, then, the Zakah due and payable is calculated as follows:

Zakaatable Value - 1 000 000 shares x R0.17 = R170 000

- 2.5% of R170 000

= R4 250,00 (Zakah due and payable)


5. The aforegoing is subject to a qualification : if the shareholder acquired the shares in JMH with the primary intention, determined at time of acquisition, to resell the same at a profit, then, in such event, the shares so acquired would constitute trading stock in his or her hands. In such event, Zakah is due and payable on the market value of the shares on the Zakah valuation date. The recent over the counter trading price per share is estimated between R6,90 and R7,50, per share.




Yours Sincerely


Specialist Corporate & Shariah Attorney


- See books “How To Calculate Your Zakah”

“The Rules of Zakah

1 Footnote (1) the above figures are constant, with no material change, as at 1st Ramadaan.

Guidance Note On Calculation Of Zakah On JMH Shares

Basic Principle

 1. The correct method of calculating Zakah in respect of the shares, owned by a Muslim shareholder, is based on the following principles:

1.1     ownership of a share in JMH represents a pro rata undivided share in the underlying assets of the company;

1.2     For that purpose, the shareholder must determine the value of the underlying Zakaatable assets, after deducting relevant liabilities, at his or her Zakah valuation date, which is normally Ramadaan.

         Zakaatable Assets

2.       We have examined the consolidated management accounts of JMH as at 31st May 2015, and have determined the following, in consultation with the Group Accounting Services Manager, Mr Rafeek Nakooda:

                                                                                                ZAKAATABLE ASSETS

          Inventory (stock)                                                              13 538 810                   Trade and Other Receivables                                          137 214 995

          Cash and Cash equivalents                                                 81 597 005

          Current Income Tax Asset                                                   9 061 815


          Total Zakaatable Assets                                                      R241 412 625

          Less Liabilities:

          Trade and Other Payables                                                    54 457 656

          Bank overdraft (borrowings)                                               67 353 546

          Current Tax Liability                                                                      1 526 259       


          Net Value of Zakaatable Assets as at 31 May 2015   R118 075 164


          Zakaatable Value Per Share


3.       The Zakaatable value per share is R37.72 determined as follows:

                    Net Zakaatable Value

                    total number of issued shares

                   R118 075 164

                        3 130 700

                   = R37.72 per share

4.       For example, if a shareholder owns 10 000 ordinary shares on his or her Zakah valuation date, then, the Zakah due and payable is:

                   2.5% of 10 000 x R37.72

         2.5% of R377 200

         =  R9 430,00 (Zakah)

5.       The aforegoing is subject to a qualification : if the shareholder acquired the shares in JMH with the primary intention, determined at time of acquisition, to resell the same at a profit, then, in such event, the shares so acquired would constitute trading stock in his or her hands. In such event, Zakah is due and payable on the market value of the shares on the Zakah valuation date. The recent trading price per share is R548.




In deducting the liabilities in paragraph 2 above, we have excluded the liability incurred in purchasing the LifeHealthCare shares. This accords with the differences of opinion, in the various schools, (Mazaaib) as to whether liabilities should be taken into account, and if so, what categories of liabilities. The Maliki school is practical because it permits only those liabilities incurred in respect of a Zakaatable asset to be deducted. In the instant case, if the LifeHealthCare share acquisition liability were to be taken into account, no Zakah would be payable, and this is contrary to the overriding objectives of the Shariah.

Guidance Note On The Transferring Zakah To An Agent Of An Eligible Recipient

       1.There are various Islamic non-profit Organizations and Institutions that, by the Grace of Allah, sincerely serve the poor and needy in diverse forms of religious, educational, economic, and social empowerment and upliftment.

2.     2. The beneficiaries are by and large poor and needy eligible recipients of zakah.

3.     3.The question arises: how can zakah funds be legitimately used to promote the objects of the relevant institution, for the ultimate benefit of the beneficiaries?

4.    4. It is an established Shariah principle, that the zakah obligation is only properly discharged by way of the unconditional, absolute, transfer of the zakah from the competent zakah payer to the poor and needy eligible Muslim recipient. This is known as tamleek.

5.    5. It is also a settled principle that the eligible poor and needy recipient may acquire possession and ownership of the zakah either directly, or, through his or her duly appointed agent, on his or her behalf. Possession by such duly appointed agent is deemed to be treated as a valid transfer of ownership of the zakah to the eligible recipient. In other words, the zakah obligation is discharged once the agent of the eligible recipient takes possession of the zakah on his or her behalf, because, at that point of possession (qabd), ownership of the zakah so possessed by the agent, passes to the eligible recipient, as principal. (see Radd al Muhtaar, chapter on zakah, dealing with the requirement of intention.)

6.    6. An associated Shariah rule arising from the relationship of principal and agent, is that the eligible recipient in his or her capacity as principal may grant his or her agent a wide unfettered discretion and broad mandate to use the zakah for the purposes and objects of the relevant non-profit organization, including a waqf.

7.    7.Against this background, the eligible recipient may grant the head of the relevant institution, the following mandate to collect and disburse zakah on his or her behalf :  

Zakaatability Of Provident And Pension fund: Summary

  1. As discussed, I had the opportunity overnight to review the Zakaatability of Pension and Provident Funds. I briefly summarize as follows:

   2.       The category of debt owed by the relevant Fund to the member is both secure and strong (QAWI), notionally analogous to:

          2.1               Property in one’s possession (see Kitab-ul-Amwaal, paragraph 1236); or

          2.2               Wadiah, or deemed possession of deposit (see Mugni, Rule 1937).

     3. Pension and Provident benefits are protected, to the extent that they cannot even be attached at the instance of creditors (section 37A and 37B of the Pension Fund Act).

  4. I am accordingly of the view that a member of a Pension or Provident Fund should pay Zakah each year on his or her Zakah valuation date on the:

4.1 Aggregate member’s contributions; or

4.2 Where appropriate, on the relevant member’s individual account value (determined on the basis, if he or she were to cease or terminate membership of the fund on the Zakah valuation date).

5.       In any event, this is the more cautious view, having regard to the fact that:

  1. 1the majority (jumhur) concur that Zakah is obligatory each year on all classes of debts, with good prospects of recovery (debtor able to pay);
  1. 2Imams Abu Yusuf and Muhammad (RA) treat all categories of debts equally as strong (qawi), with Zakah being obligatory thereon, each year prior to possession (see Badai, vol 2, p 90);
  1. 3Even in the case of doubtful debts, known as “dhunun”, where the creditor does not know whether the debtor will pay or not, there is a reliable view that, once recovered, Zakah is payable for preceding years. (see Kitab-ul-amwaal)

   6. I am taking the liberty of circulating this, so that this nothing may benefit from other considered opinions.


  • This question requires a detailed paper on the subject, but time on my side does not permit at this stage.

Are Pension And Provident Fund Death Benefits Payable Into The Estate Of The Deceased Member?

1.    The central question is : how are the pension and provident fund death benefits payable to a member to be dealt with, on his death, in terms of the Shariah? Are the death benefits payable into the deceased estate to be distributed amongst his or her heirs, determined at death, according to the rules of the Islamic Law of Succession? How are such payments characterised according to Shariah law?

2.     The Muslim jurists are unanimous that monetary rights which attach to the property of the deceased are transmissible to the heirs of the deceased upon his or her death. (for example, the right of the creditor to hold the pledged thing (rahn) is transmitted to the creditor's heirs ).

3.     There is however a difference of opinion on the category of rights per se, which are transmissible to the heirs of the holder of the rights. (for example, a stipulated right of option of a party to a contract of sale to cancel the contract within an agreed period. (Khiyar al Shart) In the Hanafi school, the option lapses upon the death of the holder. In the other schools, the option is transmissible to the heirs of the deceased holder of the right, because it is a monetary right. [1]

4.     On the other hand, there is unanimity, across all the schools, that a valid debt (dain sahih) owed to the deceased at the time of his death, forms an asset in his or her estate.

5.     The crucial question therefore is : Did the deceased member, at the time of his death, have a valid, legally enforceable entitlement against the Fund for the payment of the death benefits ? If so, the value of the benefits clearly and indisputably form part of the deceased's estate, to be dealt with according to the Shariah.

6.     The answer to this question is found in the provisions of section 37C of the Pension Funds Act, 1956. (hereafter referred to as “the Act”), which is the applicable law.

7.     This section creates a statutory order of precedence for the payment of death benefits to the dependants of the deceased member, who were legally and factually dependant on the deceased for support at the time of his death. Section 37C (1) expressly provides that the benefits payable “shall not form part of the assets in the estate” of the deceased member. The trustees of the Fund are, in terms of section 37C (1)(a), given the discretion to allocate the death benefits between the dependants of the deceased, in such proportions as they may deem equitable. In doing so, they may override the nomination of any person who the deceased may have designated in writing as a beneficiary to receive the proceeds of the death benefits.

8.     The following was stated in a Court case, Mashazi v African Products Retirement Benefit Provident Fund,[2] on the objects of the section :

        “Section 37C was intended to serve a social function. It was enacted to protect dependancy, even over the clear wishes of the deceased. This section specifically restricts freedom of testation in order that no dependants are left without support. Section 37C (1) specifically excludes the benefits from the assets in the estate of a member. Section 37C enjoins the trustees of a pension fund to exercise an equitable discretion, taking into account a number of factors. The fund is expressly not bound by a will, nor is it bound by a nomination form. The contents of the nomination form are there merely as a guide to the trustees in the exercise of their discretion...”.

9.     The Fund is a juristic person, a body corporate, which is vested with its own assets, and it is responsible for its own liabilities, capable of suing and being sued in its corporate name, and capable of doing all such things as may be necessary for or incidental to the exercise of its powers or the performance of its functions in terms of its rules. (Section 4B read with section 5)

9.     The contributions paid by the member to the Fund are accordingly owned by the Fund as a separate legal person.

10.   The member is bound by rules of the Fund. In terms of section 13 of the Act, the rules of the Fund shall be binding on the fund and its members and on any person who claims under the rules.

11.   The member acknowledges and agrees, through subscribing to the Fund, that the death benefits will be dealt with as provided in section 37C.

12.   In these circumstances, it is apparent that the deceased member has no legal entitlement or claim against the Fund, for payment of the benefits at the time of his death, with the result that the death benefits are excluded from his estate, according to the Shariah.

13.   In my view, the death benefit payments made by the trustees, in the exercise of their discretion, to the dependants of the deceased, in terms of section 37C of the Act , should be characterised as gratuitous payments in the nature of tabarru. On this basis, it makes no difference whether or not the Pension or Provident Fund in question is voluntary or compulsory.

14.   A similar conclusion was reached by certain fataawa,[3] and appears to be the view of certain contemporary Shariah experts in the field of Islamic finance.[4]



Specialist Shariah & Corporate Attorney

20 January 2014

[1]   See for example, Kitab-Al-Mugni, IBN Qudama, on sale. Kuwait Fiqh Encyclopaedia on Definition of an            

     Estate (Tarika)

[2] Per Hussan J : 2003 (1) WLD at page 632 H - J

[3]   see Contemporary Fataawa, by Mufti Muhammad Taqi Usmani, “Entitlement to Death benefits Payable by Pension

     Funds”, page 165 – 167 - Fataawa Mahmudia (20 : 402); Fataawa Haqaania (6 : 541); Ahkaam Mayyit (page 261);    

     Mufid Al Waariseen (page 29)

[4]   In a recent telephonic discussion, the distinguished contemporary jurist, Shaykh Abdul Satar Abu Guddah confirmed

     that the proceeds do not form part of the deceased estate. According to him, this view has also been adopted by

     various Shariah Boards of Islamic Financial Institutions.

Our Testimonials

I personally know the honourable Shaykh Mahomed Shoaib Omar for over thirty years. I found him to be an ardent seeker of knowledge, quick of mind &  constantly devoted to the study of the books of fiqh &  has written himself a number of papers. He has been amongst the foremost participants in drafting the Muslim Personal Law for S.Africa, so that it may be enforced there; and the majority of local Ulama have endorsed this.

~ Mufti Taqi Uthmani

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30 Ingcuce Street
(formerly Albert Street)
Durban, South Africa

Tel (031) 306 3282