At an auction of houses, four friends (persons A, B, C, D), decide upfront for only one person (A) who will be representing them, to bid so as not to

Answer

The purpose of an auction is to attain the highest price for the owner of the property. It is not permissible to interfere with this process. If each one of the group A, B, C, and D, is determined to acquire the property for himself, then they have to bid along with the mass of bidders. If they are prepared to sacrifice their right of bidding for the sake of one of them acquiring the house, they may back off and quit. But they may not collude in the manner explained in the question. The agreement by A, B, C and D is not permissible. It is baatil.

It appears from the question that these characters must be reauctioning the property even before anyone has paid for it. If so, the second auction is baatil – null and void. If the house is 'auctioned' before it is paid for, it belongs to no one. It will belong to them only after they have paid for it. Thus, if the second haraam auction is executed prior to anyone paying the price, then the deal is baatil (null and void). In this case, the 'profit' is haraam in the category of riba.

If any one had paid for it, he becomes the owner. If the second auction took place after one of the characters had paid for the house, the profit will be exclusively for the owner, i.e. the one who had paid for the house. It will not be permissible for him to bid since he is the owner. However, the sale and the profit being valid in this case is not permissibility for the immoral collusion at the beginning. Such collusion is harmful for the original owner of the property.