Ankit has taken a loan of 1,00,000 from Kishore on the guarantee of Sudeep at the interest rate of 12% p.a. After some time, due to financial crises…

Section 133 of the Indian Contract Act,1872 provides where there is any variance in the terms of contract between the principal debtor and creditor without surety’s consent, it would discharge the surety in respect of all transactions taking place subsequent to such variance. Further, according to section 135, a contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or promises not to sue, the principal debtor discharges the surety, unless the surety assents to such contract. In the instant case, Kishore advances Ankit a loan on the guarantee of Sudeep. At the request of Ankit, Kishore reduces the interest rate and also extended the time for repayment without the knowledge of Sudeep. On the basis of the above provisions and facts of the case, the surety Sudeep is discharged as variation is made in a contract of guarantee and creditor Kishore extends the time for repayment without obtaining the consent of Sudeep.