Section 136 The Indian Contract Act, 1872
Section 136 – Indian Contract Act, 1872
Title: Surety's liability when creditor compounds with, gives time to, or agrees not to sue, principal debtor without surety's consent
Bare Act Language:
Section 136.
Where a contract to give time to the principal debtor, or to compromise with him, or to give him time, or to not to sue him, is made by the creditor with a third person, and not with the principal debtor, the surety is not discharged.
🔍 Explanation:
This section deals with suretyship in contracts of guarantee, specifically about the effect of certain arrangements between the creditor and someone other than the principal debtor.
If the creditor gives time, compromises, or agrees not to sue the principal debtor, but does so with a third party (not with the debtor himself), the surety remains liable.
The logic is that since the principal debtor has not received the benefit directly, the surety's risk remains unchanged.
✅ Key Point:
If the creditor had made such a compromise with the principal debtor, the surety could be discharged under Section 133 or 134.
But if made with a third party, Section 136 ensures the surety is not released from liability.
🧑⚖️ Example:
A becomes surety for B's loan from C.
C then makes a private arrangement with X (B’s friend) to give B more time to repay, but B is not directly involved in that agreement.
A (the surety) is not discharged from liability under Section 136.
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