The interpretation of the expression 'loan' as defined by the Bombay Money-lenders Act XXXI (31) of 1947 covers both secured and unsecured loans, and the presence of security does not exclude the personal liability of the borrower.

CHAGLA, C.J. :- The prosecution alleged that the applicant before us carried on the business of a money-lender without obtaining a license and without keeping and maintaining the accounts as required by the Bombay Money-lenders Act XXXI (31) on 1947. The contention of the accused was that his advanced moneys only on security and that he took security which was sufficient to cover the whole of the loan advanced by him to his customers, and the further contention of the accused was that the Money-lenders Act only applied to cases where unsecured loans were made and not to cases where the loan advanced was a secured loan. The facts in this case are not in dispute, and the only question that arises, and the only question that has been argued, is the interpretation of Act xxxi (31) of 1947.

2. What we have to decide is, what is the true meaning according to the language used of the expression "loan" as defined by the Bombay Money-lenders Act. "Loan" is defined as an advance at interest by way of credit. Whether of money or in kind, and then it sets out what it does not include, with which we are not concerned for the purposes of this application. Mr. Somjees contention is that the expression "by way of credit" means that the advance must be only on the personal security of the debtor. If the advance is against a security either movable or immovable, then it is not a loan within the meaning of this expression as used in the Act. Mr. Somjee is right to this extent that if the legislature intended that all loans, whether secured or unsecured, should be covered by the expression "loan," then it is rather difficult to understand why the legislature used the expression "by way of credit." Even without the use of that expression, if "loan" was defined merely as an advance at interest, it would have covered both a secured and an unsecured loan. But we cannot accept Mr. Somjees contention that the expression "by way of credit" is a restrictive expression. In our view, the legislature has used an expression which is superfluous or unnecessary and that expression does not in any way affect the true meaning of loan as is apparent from the language used by the legislature. If the legislature intended to restrict the expression "loan" only to unsecured loans or to loans in which only the personal credit of the debtor was involved, then the legislature would undoubtedly have used proper language for that purpose. The legislature could have used the expression "an unsecured loan" or could have stated that loan means an advance only on the personal security of a debtor. But the legislature has used the general expression "an advance," and the expression "by way of credit" is, in our opinion, not restrictive of that general expression. It is perfectly true that the legislature did intend by using the expression "by way of credit" that the loan must be given on the credit of the debtor. But the legislature did not intend and does not so state that the loan must be only on the credit of the debtor. The difficulty in the way of Mr. Somjee is that even when a loan is secured, the personal liability of the borrower is not excluded. When a money-lender advances money and takes security, he advances it, first, on the credit of the debtor, and, secondly, on the security which he gets from his debtor. It is not as if when ha advances money on some security ha does not look to the debtor at all in the event of the security not being sufficient to satisfy the money advanced. Therefore, once it is conceded (and it must be conceded) that in law in every loan whether secured or unsecured the liability of the debtor must remain and the loan must always be on the credit of the debtor, the expression used by the legislature "by way of credit" becomes immediately intelligible. If we were to accept Mr. Somjees contention, it would lead to this extraordinary result, (and Mr. Somjee concedes that that extraordinary result must be given effect to), viz., that in