The concept and legitimacy of Rahn (pledge) in financial contracts have been established by a number of Quranic texts (2: 282) and the Sunnah (Bukhari Sahih). Rahn (Pledge) is defined as the security for the satisfaction of creditors in respect of debt on part of a debtor.
Being the student of Islamic Jurisprudence in Islam, discuss the validity of the following situations:
Mr. Bilal pledged the documents of an immovable property against debt taken from Skill bank limited.
Mr. X provided a loan to Mr. Z with a condition that Mr. Z would allow Mr. X to use his car as a fulfillment of pledge for a loan.
Mr. Ali Hassan provided a loan to Mr. Jamal of Rs. 5 Million against gold as Rahn (pledge) with market value equals to the debt amount. After 6 months the market value of the gold becomes Rs 6 million. However, without any negligence, Mr. Ali lost all the gold in a robbery at his home. In light of Sharia’h school of thoughts, briefly discuss the impact of the loss of subject matter on the obligation of both parties.