Irawan Santoso and Edi Gustia Bahri, the Petitioners’ legal counsels, at the ruling hearing of the material judicial review of the Civil Code, Monday (7/31/2023). Photo by Humas MK/Ifa.

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JAKARTA (MKRI) — The Constitutional Court (MK) ruled to dismiss the material judicial review petition of provisions on usury as stipulated in Articles 1765, 1766, 1767, and 1768 of the Civil Code. The Decision No. 63/PUU-XXI/2023 was delivered by Chief Justice Anwar Usman and seven other constitutional justices at a ruling hearing on Monday afternoon, July 31, 2023.

“[The Court] adjudicated, declares the Petitioners’ petition inadmissible,” Chief Justice Anwar Usman said reading out the decision for the case filed by Utari Sulistiowati and Edwin Dwiyana (Petitioners I-II).

In its opinion, delivered by Constitutional Justice Manahan M. P. Sitompul, the Court held that the Petitioners, who felt their constitutional rights had been violated by general conventional banking practices could instead choose loan agreement models that were not based on usury in sharia banks to prevent their constitutional rights from having been impaired. The presumed constitutional impairment would have occurred only if there had not been any other legal option to accommodate their banking transactions.

“Because there are other legal options, the presumed constitutional impairment due to Articles 1765, 1766, 1767, and 1768 of the Civil Code was legally groundless. Therefore, the Court is of the opinion that the Petitioners did not have legal standing to file the petition,” Justice Manahan emphasized.

Also read:

Usury in Civil Code Questioned

Petitioners of Usury in Civil Code Affirms Constitutional Impairment

The Petitioners alleged they had been harmed by provisions on usury in Articles 1765, 1766, 1767, and 1768 of the Civil Code. Petitioner I made a loan agreement to the amount of 1 billion rupiahs with interest rate with H. Hendri Syah Abdi based on a notary deed dated February 19, 2019 before notary Supriyanto, S.H., M.M., who works in Depok City, West Java Province. Meanwhile, Petitioner II entered into a cash loan agreement to the amount of Rp750,000 with an interest rate of 3.95%—which he found unfavorable—with PT Lentera Dana Nusantara through the e-commerce app Shopee on November 22, 2022.

The Petitioners felt their constitutional right to follow and practice their religion had been violated by the enactment of Articles 1765, 1766, 1767, and 1768 of the Civil Code as they had to agree on a loan agreement with an interest rate despite being Muslims who believe that usury in loans is haram. Article 1765 of the Civil Code reads, “It shall be permitted to stipulate interest in respect on a loan of money or other consumable items.”

They believed Indonesia’s Civil Code was the legacy of Dutch colonialists that had not been amended and was the translation of the Burgerlijk Wetboek (BW), which had many elements that were not in line with eastern or religious values in Pancasila-based Indonesia. As such, they asserted, the Court must declare the provisions of Articles 1765, 1766, 1767, and 1768 of the Civil Code in violation of Article 1 paragraph (1) of the 1945 Constitution.

In addition, the word “interest” in those articles were straight out of the Code Napoleon and, thus, irrelevant to Indonesia’s Pancasila-based economic values, which prioritizes social justice for all Indonesians. The Petitioners challenged the word “interest” in this petition as they believed it had led to their freedom to practice Islam not be guaranteed. They also asserted that it was unjust because it made creditors inferior while debtors superior. They believed usury would harm both creditors and debtors. As such, they asserted, the Court should annul the object of the a quo petition and set itself against groups that approved of usury for Muslims in Indonesia.

Author       : Sri Pujianti
Editor        : Lulu Anjarsari P.
PR            : Fitri Yuliana
Translator  : Yuniar Widiastuti (NL)

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

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