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Does the property belong to Amar or the company?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
Zaid and Amar are partners in a business. When they started the partnership, they made an agreement between them that whoever makes any property deals, the property will be bought by the company and will belong to the company. Zaid made a few deals and based on the agreement, the properties were bought by the company. Bakr showed a property to Amar which was located in a prime area. Amar took Zaid to have a look at the property and give his opinion. As soon as Zaid saw the property he said we should take it for the company and they even agreed on the price. Zaid then left the country for a few months. When he returned he asked Amar regarding the property. Amar said that he had bought it for himself as Bakr wanted to deal with Amar only and not with Zaid. Will this property belong to Amar or will it belong to the company?

بسم الله الرحمن الرحيم

(Fatwa: 311/268/D=05/1437)

If Zaid and Amir do not engage property deal (rather they buy property for the profit of the company or to save the cash) and that Amir at least has made two witnesses at the time of buying the property that he was buying the property for himself or he was paying the amount of the property from his own pocket, then in such a case the purchased property shall belong to Amir. But since he has made an agreement with Zaid hence it shall be the violation of the agreement which shall amount a sin as well as it shall earn him infamy in the eyes of the other party. The other party (Zaid) shall have the right to terminate this contract in future due to treachery of the contract.

However, if the company deals in property or the property was bought with the amount of the company then in both the cases the property shall solely belong to the company.
قال فى الشامي والظاهر ان قوله قبل الشركة احتراز عن الشراء حال الشركة ففيه تفصيل ذكره فى البحر عن المحيط وهو انه لو من جنس تجارتهما فهو للشركة و ان اشهد عند الشراء انه لنفسه …… وان لم يكن من تجارتهما فهو له خاصة . …. … والا فان نقد الثمن من مال الشركة فهو للشركة شامى ص 487 ج 6.

Allah knows Best!

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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