Rules regarding Hawala (transferring the debts etc.)
2298. If a debtor directs his creditor to collect his debt from the third person, and the creditor accepts the arrangement, the third person will, on completion of all the conditions to be explained later, become the debtor. Thereafter, the creditor cannot demand his debt from the first debtor.
2299. The debtor, the creditor and the person to whom collection is referred, should be adult and sane, and none should have coerced them, and they should not be feeble-minded, that is, those who squander their wealth. And it is also necessary that the debtor and the creditor are not bankrupt. Of course, if the debt is transferred to a person who is solvent, there is no harm even if the person assigning the transfer is bankrupt.
2300. Transferring the debt to a person who is not a debtor will not be correct, unless he accepts it. And if a person wishes to affect a transfer to a debtor for a commodity other than that for which he is indebted, (for example, if he transfers the debt of wheat while he is indebted to him for barley) the transfer will not be in order, unless he accepts it. In fact, in all cases of such transfers and Hawalas, one to whom it is assigned should have accepted it, otherwise, the transaction will be void.
2301. It is necessary that a person should actually be a debtor at the time he transfers the debt. Therefore, if he intends taking a loan from some one, he cannot transfer the prospective debt in advance to another party, telling the would be creditor to collect the debt from the party.
2302. The debtor must specify exactly the category and the quantity of the debt he transfers to another party. For example, if his debt comprises of ten kilos of wheat and ten dollars owed to one person, and he tells him to go and collect either of the two debts from a certain party, that transfer will not be valid.
2303. If the debt is fully identified, but the debtor and the creditor do not know its quantity and category at the time of assigning the transfer, the transaction is in order. For example, if a person who has recorded the debt he owes to someone in his books, assigns a Hawala or transfer of debt before referring to the books, and later, after consulting his records, informs the creditors about the quantity of his debt, the transfer is in order.
2304. The creditor may decline to accept the transfer of debt, although the person in whose name the assignment has been given may be rich, and may not fail to honor the Hawala.
2305. If a person accepting the Hawala is not a debtor to the person
giving the Hawala, he can demand the amount of the Hawala from the person who
gave it, before honoring the Hawala, unless it was previously agreed that the
payment would be deferred for a fixed period, and that period has not lapsed.
In this case, the person receiving Hawala cannot demand payment even if he himself may have honoured the Hawala. And if the creditor compromises for a lesser amount, the person honoring the Hawala should demand only that sum which he has paid.
2306. When the conditions of the transfer of debt or Hawala have been
fulfilled, the person affecting the Hawala and the person receiving it cannot
cancel the Hawala, and if the person receiving the Hawala was not poor at the
time the Hawala was issued, the creditor cannot cancel the Hawala even if the
recipient becomes poor afterwards. The same will apply if the recipient of the
Hawala was poor at the time it was issued, and the creditor knew about it.
But if the creditor did not know that the person to whom Hawala has been issued is poor, and when he comes to know of it, the recipient is still poor, then the creditor can abrogate the Hawala transaction, and demand his money from the debtor himself. But if the recipient of Hawala has turned rich, then cancelling the Hawala cannot be substantiated.
2307. If the debtor, the creditor, and the person to whom the Hawala is assigned agree among themselves that all of them or any one of them has a right to cancel the Hawala, they can do so in accordance with the clause of the agreement.
2308. If the person issuing a Hawala pays the creditor himself, at the request of the person in whose name the Hawala was issued, who was also his debtor, he can claim from the recipient of Hawala what he has paid to the creditor. And if he has paid without his request, or if he was not his debtor, he cannot demand from him what he has paid.