MUQASSAH
DEFINITION
Muqassah refers to debt settlement by a contra transaction or set-off which also means the discharge of a debt receivable against a debt payable
An implicit settlement takes place between the 2 parties, the debtor and creditor
Ibn al-Qayyim (1991, 1:321) defines it as the clearance of a debt which is due, with a debt similar in nature and character
As a result, there is no more debt between the 2 parties
Al-Dardir (n.d, 3:227) defines muqassah as the setting off a debt that is due to the debtor by a creditor who is at the same time indebted to the debtor with certain conditions
LEGALITY
HADITH
Muqassah is acceptable by the contemporary Muslim scholars
QUR'AN VERSE
A few verses contain the word qasasa
Allah (SWT) says: 'O ye who believe! The law equality is prescribed for you in cases of murder (qisas): the free for free...'
[2:178]
Allah )SWT) says: 'In the law of equality (qisas) there is (saving of) life for you...'
[2:179]
The tradition of the Prophet (SAW) and narrated by Ibn 'Umar as follows:
I came to the Prophet (SAW) and said that I sell camels in Baqi' for a price named in gold coins, but I collected in silver and vice versa. The Prophet (SAW) said: 'There is no harm to do so if the exchange is carried out according to the exchange rates of that day, and as long as you part without any debts between you
(al-Nasa's, hadith no 4593)
TYPES AND CONDITIONS
MANDATORY SET-OFF ON DEMAND (al-muqassah al-talabiyyah
CONTRACTUAL SET-OFF (al-muqassah al-ittifaqiyyah)
MANDATORY SET-OFF (al-muqassah al-jabariyah)
Only Maliki scholars opine that muqassah shall only be allowed with demand or with mutual agreement
Conditions
Spontaneous discharge of two-debts that is not contingent on the consent of both or either party
both debts should be equal in kind, description & maturity
The muqassah shall not bring any harm to the contracting parties or other related parties
each party should be a creditor and debtor simultaneously
The muqassah should not result in the violation of the Shari'ah
It is affected by the demand of one of the parties to discharge the debts by way of set-off
Conditions
The creditor for the superior debt in terms of quality & duration should consent to relinquish his additional right/privilege
Both debts should be equal but not necessarily in quality & date of maturity
Each party should be creditor and debtor simultaneoulsy
The muqassah should not result in the violation of the Shari'ah
There is no need for the debt to be similar in kind, description or maturity
Conditions
It is the discharge of 2 debts by the consent of the 2 parties to extinguish their obligations towards each other
Each party should be a creditor and a debtor simultaneously
Both parties must consent to the muqassah
The muqassah should not result in the violation of the Shari'ah