The Islamic Personality by Sheikh Taqīuddīn An-Nabahānī

Once the pledge is completed the thing falls under the possession of the pledgee after its possession is taken. However this does not mean that the pledgee benefits from the pledge; rather the presence of the pledged good in the possession of the pledgee is only to secure him over his debt only. The pledge remains for his owner even if the pledgee deserves the debt upon the pledger. The pledgee in the days of ignorance would own the pledge if the pledger did not pay him what he owed him at the imposed time. Islam came and invalidated this. He (saw) said:

The Messenger’s statement “he should not unredeem the pledge from its owner” i.e. the pledgee does not deserve the pledge if the pledger does not release it in the stipulated time. So the pledged thing remains the property of the pledger and the benefit remains his property because it is his booty and it enters into his (saw) statement “for him is his booty (gharam).” Additionally the benefit is the increase in value of the pledged thing so it has resulted therefrom, whether this increase is a benefit like residing in the house or it is a thing like the produce of the tree and the cow’s child. It is the property of the pledger and the pledge contract did not take place over it, so it is not pledged since the contract is over the thing not its benefit. So long as the benefit is the pledger’s property, it is for him to take it so he can rent the pledged house, and to take its wage whether he hired it to the pledgee or another. Nor is this wage a pledge but rather it becomes the property of the pledger nor does it follow the pledge because it is not among the follower of the house which enters into the sale without mentioning like the house keys. Hence the pledgee cannot benefit from the pledged thing with the proof that it is pledged to him or it is under his possession; rather its benefit is for its owner.

Since the thing’s benefit is for its owner, he can gift the benefit just like he can gift the thing and he can permit whoever he wishes to benefit from the thing. Except that the pledger’s permission to the pledge to benefit from the thing which he pledged differs from the permission to someone else. It is permitted for the pledger to permit any human being other than the pledgee to benefit from the pledged thing. As for his permission to the pledgee, it has some details. If the pledge is for the sale price or house rent or any debt other than the loan, it is permitted for the pledgee to benefit from the pledged thing with the permission of the pledger. This is because it is his property so he can permit whoever he wishes to benefit from it including the pledger and others. There does not exist any text preventing that as there did not come any text excluding the pledgee, so the rule remains general. And because it is permitted for the seller to increase the price and the landlord to increase the rent if it deferred for a period, it is permitted for him to permit the benefit of the thing as an increase on the price of the sold thing or an increase on the rent of the hired thing. This is not considered riba as the definition of riba does not apply upon it or its reality, nor does it enter into the usurious things limited by the text. Rather it is the deferred price higher than the immediate price and hiring for a deferred wage higher than the wage in cash, and these are all of the transactions permitted by the Shar’a.

Whereas if the debt is a loan such as one person loaning another one thousand for a year, and he pledges to him his house and permits him to benefit of the pledge, it is not permitted for the pledgee in this case to benefit from the pledged thing even if the pledger permitted. This is due to the text coming prohibiting this. It has been narrated from Anas (ra)

And it is narrated from Anas (ra) from the Prophet (saw) who said:

Al-Bukhari narrated in his Sahih from Abu Burdah bin Abu Musa who said:

Al-Baihaqi extracted in Al-Ma’rifah from Fudhala bin Ubayd:

Al-Harith bin Abu Usamah narrated from the hadith of Ali (ra) with the words

And in the narration:

And due to the consensus (Ijma’a) contracted that each debt wherein an increase is stipulated is forbidden. Ibn Mundhir said: ‘They had an Ijma’a that where the one lending stipulates an increase or gift upon the one seeking a loan, and he lends upon that then taking the increase upon that is riba.’ It is narrated from Ubayy bin K’ab and ibn Abbas and ibn Masoud that they prohibited the loan with a benefit running. From these ahadith and athar it is clarified that the loan whose benefit runs, if the increase is stipulated, it is forbidden as one opinion without difference of opinion. If the person lent anything without condition and he repaid it with increase upon what he borrowed of cash, it is also forbidden. However if he gifts him a gift extra upon what he borrowed, it is considered. If it were his custom to gift him, there is no harm in that and it is permitted for him to accept the gift. If it were not of his custom to give him a gift, then it is not permitted for him to accept it due to the hadith of Anas (ra). As for what Al Bukhari narrated in his Sahih from Abu Hurairah (ra)

And as for what Abu Dawud narrated from Abu Rafi’ who said:

This is not from the category of stipulating an increase in the loan or from the category of increase upon the amount or borrowed thing. Rather he merely paid him similar to what he borrowed but greater than it in age or body. This is an animal for an animal so it is from the type of good repayment not from the type of increase. Hence the Messenger (saw) came with the reason of increase with an expression indicating reasoning and said:

The reasoning is explicit and it is the good repayment not the payment increased over what was borrowed. Hence only in the pledge in the situation of the loan forbids the people from benefiting from the pledged thing as it is not from the good repayment i.e. the good but rather from the type of increase over the amount or the borrowed thing whether he stipulated it or not. It is not from the type of the gift of which it is his nature to gift him.

However all this is if the benefiting by the pledged thing is without compensation. Whereas if the benefiting with the pledged thing is with compensation such as where the pledger rents the pledgee the house for compensation, it is permitted to benefit from the pledged thing in the loan and otherwise. This is because he does not benefit from the loan but by renting on condition that it be by a rent without any bias. If he has bias with him in this, its rule is the rule of benefiting without compensation; it is not permitted in the loan but permitted in other things