Haram literally means ‘the prohibited, unlawful. It is a prohibition determined by Allah SWT to His servants from engaging in it. Dr Yusuf Al-Qardhawi define it as ‘that which the law-giver has absolutely prohibited; anyone who engages in it is liable to incur the punishment of Allah in the Hereafter as well as a legal punishment in this world.
Meanwhile haram transaction can be defined as a prohibited muamalah activity instructed by Allah SWT to His servants from involving in this activities. Basically, the haram transactions are clearly mentioned in the Al-Quran and it is an obligation for Muslims to avoid them. Salman Al-Farisi reported that when the Messenger of Allah (PBUH) was asked about animal fat, cheese and fur, he replied, “The halal is that which Allah has made lawful in His book and the haram is that which He has forbidden, and that concerning which He is silent. He has permitted as a favor to you. (Reported by Al-Tarmidhi and Ibn Majah).
Basically all transactions which giving benefits for the involved parties are permitted or halal. Nothing is haram except what is prohibited by a sound and explicit nas (nas means either a verse of the Al-Quran or a clear, authentic and explicit sunnah.) It is solely the right of Allah SWT in making any transaction halal or haram. There is no other party who has being given the same right no matter who they are.
Transactions of Haram activity
The transaction is not an aim of any activity but it is a tool in achieving the targeted aim. For an example, in order to have a good shelter, a man needs to buy a house. The aim of this activity is to own a house but in order to get it he needs to enter into sales and purchase agreement. In a straight forward transaction, this agreement is halal for both i.e. the means and the end.
However, if the end is haram, for example to involve in an alcoholic business, it will lead to a haram transaction even as per mentioned above that all transactions are permissible. This is based on Islamic principle that if something is prohibited, anything which leads to it is likewise prohibited. In Arabic, it is stated as :-
ما لا يتم الواجب إلا به فهو واجب
To support this argument, Muslim jurists have established the criterion that whatever is conducive to or leads toward haram is itself haram. On the same ground, the Muslims believe that the sin of haram is not limited to the person who is engaged into the transaction but it will include others who have supported him in this, materially or morally; each is held accountable according to his share.
Based on layman understanding, makruh (the detested) is something which is disapproved by Allah SWT but not in a strong way. Dr Yusuf Al-Qardhawi defined makruh as that which is disapproved by the Law-Giver but not very strongly. The makruh is less in degree that the haram, and the punishment for makruh acts is less than for those that are haram, except when done to excess and in a manner which leads an individual toward what is haram.
However, makruh tansactions are related to the transactions which the purpose is to cater the makruh activity or the activity which fall under the gray area. For example, to sell grapes is halal but to sell it to a guy that having a rumor that he will use it for the wine production is makruh except the seller has a proof that the guy will confirm is a wine producer and will use it in his production and the latter is haram because it is clear involving in the haram activity.
Hanafis divided makruh into two sectors, one is makruh tanzihan and the second is makruh tahriman. Makruh tanzihan has been defined as an act from which one is required to refrain in a non-absolute and non-compulsive manner. It is far from haram. On the other hand, makruh tahriman being closer to unlawfulness means that it is an act of which one should beware and one is not liable to punishment by fire and it is closer to haram compared to the makruh tanzihan.
In the issues of makruh, Muslims are advisable to avoid it as it will make them more closer to Allah SWT. The Prophet SAW said :-
عن أبي عبدالله النعمان بن بشير رضي الله عنهما قال : سمعت رسول الله صلي الله عليه وسلم يقول : (إن الحلال بين وإن الحرام بين وبينهما أمور مشتبهات لا يعلمهن كثير من الناس فمن اتقي الشبهات فقد استبرأ لدينه وعرضه ومن وقع في الشبهات وقع في الحرام كالراعي يرعي حول الحمي يوشك أن يرتع فيه ألا وإن لكل ملك حمي ألا وإن حمي الله محارمه ألا وإن في الجسد مضغة إذا صلحت صلح الجسد كله وإذا فسدت فسد الجسد كله ألا وهي القلب.
On the authority of Abu Abdillah An Nu’man Bin Basheer (radiyallahu Anhuma) who said: I heard the Messenger of Allah (SAW) say:-
That which is lawful is clear and that which is unlawful is clear, and between the two of them are doubtful matters about which many people do not know. Thus he who avoids doubtful matters clears himself in regard to his religion and his honour, but he who falls into doubtful matters (eventually) falls into that which is unlawful, like the shepherd who pastures around a sanctuary, all but grazing therein. Truly every king has a sanctuary, and truly Allah’s sanctuary is His prohibitions. Truly in the body there is a morsel of flesh, which, if it be whole, all the body is whole, and which, if it is diseased, all of (the body) is diseased. Truly, it is the heart. (Hadith by Al-Bukhari and Muslim)
From the above hadith we can extract that, it is better not to involve in any makruh transaction no matter either it is makruh tanzihan or makruh tahriman as it is in a grey area and the involvement will sometime is very difficult to judge. The good judge for such activity is only he himself and Allah SWT. It is why the hadith is directly discussed about the function of the heart.