1. Where goods are set aside at the supplier’s warehouse: this raises the crucial issue: Does such setting aside per se constitute constructive possession in the form of تخلية , ( “ giving up”) in the sense that the bank as the holder of the relevant invoice is able to access and take possession of the precise, identified, underlying goods, whenever it wishes.

2. The answer is that the precise goods , which are the subject matter of the First Sale, between the supplier ( as seller) and the bank ( as purchaser) must be precisely identified, and distinguished from the remaining , bulk goods in the warehouse belonging to the supplier.

3. Put differently, once the goods, so purchased by the bank, have been pinpointed , separated and precisely identified, by appropriate  markings or other method, then , in such a situation, constructive possession in the form of تخلية   is deemed to have occurred.

4. It is not the right to take possession of the goods reflected on the invoice from the general , bulk stock located in the warehouse, ( out of which the goods sold are to be removed or taken) rather it is simply taking possession of the goods already identified, separated  and pinpointed,  as belonging to the bank , as purchaser.

5. In other words, if the specific , pinpointed, identified goods, reflected on the relevant invoice, which have been separated from the larger bulk stock, are destroyed or damaged, the risk ضمان falls on the bank, prior to the second sale to the client.

6. In these circumstances, it is prudent to undertake random audits to ensure that the goods , reflected on the relevant invoice, are so specifically identified , ascertained and separated from the general , bulk stock in the warehouse.

ان تخلية انما تعتبر قبضا حكميا اذا كان المبيع متعينا متميزا عن غير المبيع. اما التخلية بدون التعيين ، فانه ليس تخلية فى الحقيقة و ليس فى حكم القبض
" فى بيع قفير من صبرة اذا كال الباءع منه قفيرا بغير حضرة المشترى فهلك ان البيع قاءم يتعين فيما بقي. و ان لم يبق فى المخزن شيء بطل البيع و لا يهلك شيء من مال المشترى: حاشية الشلبى على تبيين الحقائق الزيلعي.

And Allah Knows Best
M S Omar
6 April 2021