Report No. 63
3.4. Interest Act not confined to money-lending.-
In our view, the words used in section 1 of the Act clearly indicate that the Act does not purport to deal solely, or even primarily or mainly, with money-lending as such; its sweep is very much wider and if, in some cases, it conceivably seems to apply to money¬lending transactions, properly so-called, that is only a case of incidental application. Incidentally, most of the money-lending transactions which fall within State legislation relating to money-lending provide for the payment of interest, and it is because of those provisions that the transactions covered by such Acts are outside the purview of section 1. In pith and substance, therefore, the Act applies to matters which fall under residuary entry in the Union List, as already stated1. Our subsequent discussion will show that when judicial decisions had occasion to consider the scope and effect of section 1, most of the transactions in issue in those decisions were other than those of 'money-lending" technically so-called.
1. Para. 3.1, supra.