Chapter VIII - Of Indemnity and Guarantee
Section 135
Section 135: Composition and binding extensions of time
A binding composition, extension of time or agreement not to sue the principal debtor can discharge a non-assenting surety.
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This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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.
Rule and business relevance
The provision concerns a contract between creditor and principal debtor. The surety is discharged unless the surety assents to that contract.
Limits and related provisions
Distinguish a binding arrangement with the debtor from mere delay under section 137 and an arrangement with a third person under section 136.
Hypothetical business example
Hypothetical example: A lender and borrower contractually defer payment without the guarantor’s assent. They must consider section 135 rather than treating the extension as harmless administrative delay.
Practical decision flow
Identify the binding creditor–debtor agreement.
Determine whether it compounds, gives time or promises not to sue.
Record the surety’s assent or assess the resulting discharge.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Identify the binding creditor–debtor agreement.
- Determine whether it compounds, gives time or promises not to sue.
- Record the surety’s assent or assess the resulting discharge.
Avoid
- Distinguish a binding arrangement with the debtor from mere delay under section 137 and an arrangement with a third person under section 136.
Glossary
- Composition
- An agreed arrangement settling or adjusting the debt.
- Assent
- The surety’s agreement to the relevant arrangement.
Frequently asked questions
Does surety assent affect discharge?
Yes. It is the express exception in this section.
Is simply waiting to sue the same thing?
No. Mere forbearance is separately addressed in section 137.
Must the time agreement be with the principal debtor?
That is the arrangement described here; section 136 treats an agreement with a third person differently.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026