A draw among those who deposit a fixed sum

Question

Question: A method of trade under a regular scheme is running in almost the whole world, and our India is also involved in it. Its form is as follows: some trader, some company or some party enrols members. For example, someone runs a “bicycle scheme”. The actual price of the bicycle is 500 rupees. In this case twenty members are enrolled at 50 rupees a month, and a draw is held once a month. The member whose name comes out in the draw gets the bicycle for only 50 rupees.

Answer

This transaction is not valid in the Sacred Law. At the time of the contract the price of the object of sale must be fixed, and here it is not fixed but unknown (majhul). The shortfall and the excess are obvious: on the basis of which contract is there an excess over the amount that was paid? It can be called both qimar and riba.

Source: Fatawa Mahmudiyya

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