Subjecting one transaction upon another

Q: One of my friends invited me for a business deal as following:

My friend is planning to buy a petrol pump in India. For that he requires 3 Crore, and he has only 2 Crore with him. Now he asked me to join with him by giving 1 Crore so that the petrol pump can be registered under his ownership. Then the condition of the business will be as follows

Condition 1: He will give me the full access to run the business for 3 years and all expenses and profits will come under me. He will not look in to the business for 3 years.

Condition 2: I have to give him a monthly rent (as per the current market in that location) for running the business in his land/petrol pump.

Condition 3: After 3 years, he will return the money (1 crore) which I had given to him at the beginning. He is telling me that this money will be considered as a security deposit and the money will be deducted in case any damage or loss occured during these 3 years. I would like to know whether this deal is halal or haram.

A: It is not permissible in Shari'ah to subject one transaction upon another or to subject giving a loan on the condition that the one receiving the loan should do a business transaction or lease his property to the one giving the loan. In this case, your friend hasn't yet purchased the petrol pump and he is wishing to take a loan from you on the condition that after he purchases it, he will make you his tenant for three years. Hence, subjecting the loan upon this condition is not correct. However, if you wish to give him the loan to purchase his petrol pump, you may do so and the loaned amount will have to be returned to you in the future. After he purchases the petrol pump, if you both wish to enter into the explained agreement, it will be permissible.

And Allah Ta'ala (الله تعالى) knows best.

 

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)