06 Mar 2026 13:51 PM
Supreme Court
Supreme Court

Gurantor -- Liability of-- Surety Remains Liable For Original Guaranteed Amount -- Excess Withdrawals Without Consent Not Recoverable

Under Section 133 of the Indian Contract Act, variance in the terms of a contract between the principal debtor and creditor, made without the consent of the surety, discharges the surety only in respect of transactions occurring after such variance. The surety remains liable for the original guaranteed amount. An "all or nothing" approach to the liability of a surety is contrary to Section 133. Section 139 applies only where the creditor's act impairs the surety's remedy against the principal debtor — not merely where overdrawing is permitted.

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