Section 135 The Indian Contract Act, 1872
Section 135 of the Indian Contract Act, 1872 deals with "Agreement to give time to the principal debtor."
Section 135 – Agreement to give time to principal debtor
A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or not to sue the principal debtor, discharges the surety, unless the surety assents to such contract.
🔍 Explanation:
Section 135 protects the surety in a contract of guarantee. It says that:
If the creditor enters into an agreement with the principal debtor to:
Make a composition (i.e., settle the debt for less than originally agreed),
Give more time for repayment, or
Promise not to sue the principal debtor,
Then the surety is discharged from their liability unless they have consented to such an agreement.
🧑⚖️ Illustration:
Let’s say:
A (creditor) lends money to B (principal debtor), and C is the surety.
A and B later agree that B can repay the loan after 1 year instead of 6 months.
If C (surety) did not consent to this agreement, C is discharged from liability.
📌 Key Points:
Protects the surety from being bound to a changed contract without their knowledge.
Consent of the surety is crucial for such changes to be binding on them.
The rationale is that the surety agreed to guarantee under certain terms. Changing those terms without their permission releases them.
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