He sells appliances on installments secured by mortgages
Q: I have a company which sells electrical appliances in installments secured by mortgages about which Allah (Exalted be He) states:
And if you are on a journey and cannot find a scribe, then let there be a pledge taken (mortgaging)
The customer comes in to buy electrical appliances from me at a certain price and I ask for a quantity of gold as a mortgage that is equal in value, or a bit less, to remain with me as a trust until they complete the installments according to the predefined period on which we agree. When the customer pays all the installments as agreed, I return their property in full as I took it; knowing that I weigh the gold and determine its type and value on the day the sale is concluded. Is what I do the Shar`y (Islamically lawful) manner of mortgaging? If I agree with the customer to sell the mortgaged item in case the due installments, or some of them, are not paid, am I entitled to sell it without their knowledge or must I inform them (Part No. 11; Page No. 141) that if they do not pay, I will sell it? Please give us advice on that issue.
Your requesting the customer, who buys a commodity from you in installments, to mortgage with you in return for that debt gold or the like of the same value is permissible as is proven in the Qur'an, Sunnah (acts, statements or approvals of the Prophet) and the Ijma` (consensus of scholars). The
principle of mortgaging is to document a certain debt with a specific item that can permissibly be sold to repay the debt in case it is difficult to retrieve the debt from the debtor. However, you must keep that mortgage because it is a trust with you, and if the mortgager does not repay the debt or sell the mortgaged item to repay the debt from its price, then the reference in selling it and taking back your right is the Islamic court.May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.