Answered by Mufti Muhammad ibn Adam al-Kawthari
I plan to buy a car soon. Is it okay for me to buy a car in an auction without knowing the origin of the car?Answer: In the name of Allah, Most Compassionate, Most Merciful,
Buying and selling on the basis of an auction is perfectly permissible and acceptable according to Shariah. In fiqh terminology, it is termed as ‘Bay al-Muzayada’.
Sayyiduna Anas ibn Malik (Allah be pleased with him) narrates “that the Messenger of Allah (Allah bless him & give him peace) once sold a saddle and bowl through auction. He asked: “Who will buy this saddle and bowl from me? A Companion said: “I will buy it for one Dirham”. The Messenger of Allah (Allah bless him & give him peace) replied: “Who will increase on one Dirham? Another Companion gave him two Dirhams, So the Messenger of Allah (Allah bless him & give him peace) sold the two items to him” (Sunan Tirmizi, no. 1218 & Musnad Ahmad, 3/114).
In view of the above Hadith, the Fuqaha have stated that the practice of auctioning is generally permissible (See: al-Mawsili, al-Ikhtiyar li ta’lil al-Mukhtar, 2/278).
The Hadith in which the Messenger of Allah (Allah bless him & give him peace) stated: “None of you transact on the transaction of your brother” (Sahih Muslim) is understood to be in the case where the parties have agreed on a price or the seller is inclined towards selling the item to a person.
Imam al-Mawsili states in al-Ikhtiyar:
“The meaning of the Hadith is that the buyer and seller agree on a price with only the formalities left, and a third person comes and offers to pay more. However, if he offered to pay more before any mutual agreement took place between the two parties, then this is permissible” (2/289).
Therefore, auctioning will be permissible, as the seller does not agree to sell an item to any of the bidders; rather he anticipates the highest bid and then sells it accordingly.
As far as the origin of the items sold in auctions is concerned, it should be remembered that if one does not have any knowledge with regards to the origin of a particular item, then it will be permissible to purchase it. If in a particular case, it is known that an item was stolen or falsely snatched from the rightful owner, then in that particular case it will be impermissible to purchase it. This is a general ruling that is not only specific to auctioning.
And Allah knows best
Muhammad ibn Adam al-Kawthari