Pekalongan Religious Court Decision No. 348 of 2015: Murabahah Financing Facility

The plaintiff submitted that the first defendant had issued him with a murabahah financing facility (Murabahah Financing Facility Agreement No: PLS/2010/008/MRB) valued at IDR 330 billion, which he had used to finance the construction of a home. The plaintiff had obtained from the first defendant another murabahah financing facility (Murabahah Financing Facility Agreement No: PLS/2011/077/MRB) valued at IDR 1.459 billion, which he had used to supplement his own business capital to purchase stock for his chilli and red onion supplier business. The plaintiff had repaid IDR 1 billion of the collective total of the two agreements, leaving him IDR 3.789 billion in arrears. In order to be eligible for both agreements, the plaintiff had leveraged the following properties and their respective deeds of title:

  1. three adjacent plots of land upon which were situated a home and restaurant;
  2. two adjacent plots of land upon which were situated a home and warehouse;
  3. a plot of land upon which was situated a home;
  4. another plot of land upon which was situated a home, as well as two plots of farmland.

When the price of chilli dropped the plaintiff incurred substantial financial loss. Consequently, in 2010, 2011, and January-February 2012, the plaintiff repaid to the first defendant IDR 2.068 billion. Having defaulted nonetheless, the second defendant sold one of the plaintiff's properties for IDR 170 million at auction. The plaintiff submitted that the property would have sold for IDR 300 million if the sale had been made available to the public. Similarly, the plaintiff submitted that the first defendant had sold, in an underhanded manner, one of his leveraged properties for IDR 250 million, and another two for IDR 150 million each, when they all would have sold for IDR 300 million each had the sales been made available to the public. The plaintiff also submitted that he had already repaid to the first defendant IDR 2.638 billion, while the first defendant had threatened to auction the plaintiff's remaining leveraged properties. The plaintiff maintained that to relieve him of all his assets was contrary to the law given that he intended, in good faith, to repay the loans.

In dismissing the plaintiff's action, the court referred to the discrepancy in the plaintiff's submission: at point 2, the plaintiff submitted that both defendants had systematically, collectively, and collegially worked to relieve him of his assets, while at point 10, the plaintiff submitted that the first defendant had threatened to auction his remaining properties through the second defendant. The court also took issue with point 3 of the plaintiff's submission, noting that it suffered from insufficient clarity and detail with regard to the object of the auction, as well as the language used.

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