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Goodwill pagdi system

Answered as per Hanafi Fiqh by Muftionline.co.za

Q: I have a Question related to old rent property system called pagdi system. My Freind had a Shop in 2002 and he wanted to give it for rent. But unfortunately  the old pagdi rented system was imposed at that time and most of the properties were rented on this system. So he also accepted the pagdi rented system and gave it for pagdi Rent based ….

The Rules in this System Are Mentioning Below

For E.g

1) The Total Price Of the Shop is 2,00,000

2)The Owner Get Half Of the Amount 1,00,000 At the Start of Pagdi Rented System from there Tenant

3)The Rent was Fixed Rs 700 Per Month and After Every 11 Month 10% has to be increased For E.g If the Rent was 700 In Jan/1/2002 Than On Dec/12/2002 the amount of Rent Has to be increased by 10% (700×10÷100=70)

4) So After 11 Month the Amount is 770 Which Again Has to be increased 10%After 11 Month

5) And the Whole System Run Is based on that And Continue So On

6) The Amount Of the Shop Now in 2017 is Approx 2,00,00,000

Q) My Question is that The Ulmas gave the Fatwa that Pagdi System is Haram in Islam All the Pagdi System Has to be Ended And Only Pure Rented income is Halal  So After this My Question is that My Freind Is the Owner Of the Shop But The Tenant Lefted the Shop in 2012 Due to some Personal Reasons And Also Informed my friend who is the owner of the Shop that he lefted the shop For Approx One year And Come back Soon But he Did nt come back After that period And Take Out All of his Furniture Assets Everything From the Shop & Also Can’t Gave Any Rent From 2012 to 2017  My Freinds Shop Was Closed And he did not get any Benefit from it He File the Case with the Court About all this situation And After Few Years The Court Ordered him the Case In his favour As An Ex Partee (Because the tenant Not Presented in Any Session of the Court) And My Freind Declared  as a Legal owner of the Shop  By The Court Of Law… It Is Halal To get The Shop In this way? Because We live in An Islamic Ideology State Pakistan And All The Rules & Regulation Of the Court Law is based on the Principles of Islam…

Q Is My Friend Feel Free In All this Way that it is Halal?

Q Is he be able to do his business in this shop According to Islam?


A: The goodwill pagdi system is incorrect. The alternative halaal system is that you inflate the rental. For example, you may take 5000 per month.

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

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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