What is the ruling of Islamic law on returning an appliance purchased in installments after it has repeatedly malfunctioned, and should the seller pay the installments on behalf of the buyer in the event that the appliance is returned?

The transaction mentioned consists of two parts: The first is a permissible Murabaha (cost-plus financing) with conditions. As for the second part (returning the device to its original owner to pay his installments), it is not a rescission, because the option of defect is for you against the seller to you, not against your friend. You can sell the device to your friend at the same price you bought it for, and this is permissible even if it resembles the "triple stratagem" because there was no collusion in it for the commodity to return to its original owner, and a defect appeared in it that was not known. You may return the device to the seller due to the option of defect, or sell it to your friend to take over the payment of installments.