What is the ruling if the recipient of payment finds the currency defective immediately upon receipt?

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If the currency is specific (ayn), the contract is voided immediately upon its return. The parties must initiate a new contract if they wish to proceed. If the payment was a debt obligation (fi al-dhimmah), the recipient has the right to demand the sound payment within the session, and the contract is not voided by returning the defective item. This is because the contract was stipulated upon sound currency, so demanding the sound item when defective currency is delivered is permissible, and the receipt of the defective item does not invalidate the original transaction.