Loan - Definition - Law Dictionary Home Dictionary Definition loan

Definition :

Loan [hl'n, Sax.], anything lent or given to another on condition of return or repayment. As to loan of money, see MONEY LENDERS ACT.

The distinction between a loan and a deposit is that in the case of a loan it is ordinarily the duty of the debtor to seek out the creditor and to pay the money according to the agreement. In the case of a deposit it is the duty of the depositor to go to the depositee and to make a demand for it, Gurcharan Das v. Ram Rakha Mal, AIR 1937 Lah 81.

The word 'loan' used in s. 4 has the same meaning as it has in s. 2(f) and includes a transaction on a bond bearing interest executed in respect of past liability, Jiwanlal Achariya v. Rameshwarlal Agarwalla, AIR 1967 SC 1118: (1967) 1 SCR 190. [Bihar Money Lenders (Regulation of Transactions) Act, 1939 (7 of 1939), ss. 2(f) and 4]