Ordinarily, an owner who damages his own property bears the loss personally. A pledged asset is different because its economic value also secures the creditor’s right. The pledgor’s destructive act therefore injures a protected third-party interest.
Example: a debtor pledges a machine and later renders it unusable. The security has disappeared, so a monetary substitute can become payable. This is not an arbitrary penalty added to the loan; it replaces damaged collateral.
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Why an owner can be liable for destroying his own pledge
Kitab al-Rahn: Manumission, Destruction and Liability for Injury
Ordinarily, an owner who damages his own property bears the loss personally. A pledged asset is different because its economic value also secures the creditor’s right. The pledgor’s destructive act therefore injures a protected third-party interest.
Example: a debtor pledges a machine and later renders it unusable. The security has disappeared, so a monetary substitute can become payable. This is not an arbitrary penalty added to the loan; it replaces damaged collateral.