Some time in 637 A.D., Khalid had a special bath in which he rubbed his body with a certain substance which had an ingredient of alcohol in it. This was reported to Umar, who reprimanded Khalid as follows:
"It has come to my notice that you have rubbed your body with alcohol. Lo Allah has made unlawful the substance of alcohol as well as its form, just as he has made unlawful both the form and substance of sin. He has made unlawful the touch of alcohol in a bath no less than the drinking of it. Let it not touch your body for it is unclean."
Khalid explained that the drug had been boiled before use and all alcohol therein had evaporated. Umar did not accept the explanation, but he chose to take no action.
After the battle of Marash in 638 A.D., Athath bin Qais a Kinda chief and poet wrote a panegyric in the praise of Khalid. Khalid gave the poet a reward of 10,000 dirhams. When this was reported to Umar, he commanded Abu Ubaida:
"Bring Khalid in front of the congregation, tie his hands with his turban and take off his cap. Ask him from which funds he gave such a high award to Athath, from his own pocket or from the spoils acquired in the expedition of Marash. If he confesses to having given the award from the spoils, he is guilty of misappropriation. If he claims that he gave the money from his own pocket, he is guilty of extravagance. In either case dismiss him and take over the charge from him."
The command of Umar was carried to Abu Ubaida by Bilal, the Muezzin. Bilal arrived at Emessa and handed over the Caliph's letter to Abu Ubaida for compliance. Khalid who was then at Qinissrin was summoned to Emessa.
At Emessa when Khalid called on Abu Ubaida, he was informed of the Caliph's charge against him. Abu Ubaid asked Khalid whether he was inclined to confess his guilt. Khalid wanted some time to consider the matter and this was allowed. Khalid consulted his sister who was at Emessa. She advised him against confession. Khalid accordingly told Abu Ubaida that as he was not guilty, there was nothing to be confessed.
A congregation of the Muslims was held in the principal mosque at Emessa. Here Bilal faced Khalid and enquired, "O Khalid, did you give Athath ten thousand dirhams from your own pocket or from the spoils?" Khalid was astounded, and for some time he was quiet. Bilal walked unto him; took off his turban and tied his hands therewith. Bilal said that he had done so in accordance with the orders of the Caliph. He repeated his question as to from where ten thousand dirhams had been paid to Athath. After some time Khalid found his voice and said that he had paid the money from his own pocket.
Abu Ubaida took over the charge from Khalid and instructed him to proceed to Madina to see the Caliph.
Khalid arrived at Madina as an embittered man. When Khalid met Umar, Umar paid him a tribute: "Khalid you have done what no other man has done; but it's not the people who do; it is Allah Who does".
Khalid protested against the treatment meted out to him. Umar said, "Whence comes all this wealth?"
Khalid said, that it was the share of his spoils Khalid estimated that his wealth did not exceed 60,000 dirhams. He offered, "Whatever exceeds 60,000 dirhams is yours."
Umar had the possessions of Khalid checked and evaluated. The assessment worked out to 80,000 dirhams. Umar accordingly confiscated Khalid's possessions valued at Rs. 20,OOO. After this transaction, Umar said to Khalid:
"That settles the case. I have no more charge against you. I assure you that you are honourable in my eyes' and you are dear to me. After this day you will have no further cause of complaint against me."
Khalid felt bitter. After staying in Madina for a few days, Khalid left for Syria. Many people gathered to bid farewell to the General. The people felt that Khalid the hero of their dreams had been treated with injustice.
After Khalid had left, the people of Madina waited on Umar and wanted him to return to Khalid his property which had been confiscated. Umar did not accept the appeal He said, "I do not trade with what belongs to Allah and the Muslims". The issues which agitated the public mind were: Whether Umar had taken such drastic action because of his personal ill will against Khalid or whether Khalid was really dishonest. Umar clarified:
"I have not dismissed Khalid because of my anger or personal ill will against him. I have not dismissed Khalid because he was dishonest. I have dismissed him because the people glorified him and were misled. I feared that the people would rely on him. I want the people to know that it is Allah Who does all things; and that there should be no wavering in the faith of the people in Allah by attributing success in any field to any human being."