Thursday, April 23, 2026
Latest:
2024April 2024BankingHigh CourtInsuranceLatestLegal

Novation of Contract – Liablity of guarantors to repay loan – Temporary overdraft – Extension of time to repay without consent of the guarantors – Section 133 of the Contract Act.

legaldeli

On 20.7.1994, the Deputy Registrar, Cooperative Societies had granted certificate under Section 101 of the MCS Act, 1960,

Respondent Nos.1 to 3 had taken overdraft facility / term loan for two months I.e. upto 22.6.1992.  Respondent Nos.4 and 5 were guarantors.  On 18.7.1992, the borrowers had applied for extension to repay the loan.  Time was extended till September, 1992.

HELD that the question revolves around is whether extending the time to the principal debtor by the creditor is novation of the contract and hence, the guarantors are not bound by such a contract.  Admittedly, the consent of the guarantors was not obtained while extending the time.  Section 135 of the Contract provides for discharge of surety when creditor gives time to the principal debtor and that is the variance in terms of the contract under Section 133.   In other words, a novation of contract discharges the surety. There was a novation of contract without consent of the sureties and hence, they are not liable to repay the loan

.Judgment (Aurangabad Bench) dated 10.4.2024 in W.P.No.2856 of 1996 of Mohanlal Premji Ramani  Vs. Deogiri Nagar Cooperative Sahakari Bank Ltd, Aurangabad and others with connected writ petition

You May Also Like

Bombay HC – Majority Arbitral Award – Mumbai Metro One Project – MMRDA

legaldeli

Bombay HC Raps PMC – Tree Felling Permission Requires Strict Procedural Compliance

legaldeli

Commercial Court – Jurisdiction – every dispute of property and MOU for development of property per se is not “commercial dispute”

legaldeli

Leave a Reply

Your email address will not be published. Required fields are marked *

I HAVE READ THE DISCLAIMER AND AGREE TO IT.

User Acknowledgement

By proceeding further and clicking on the "AGREE" button herein below, I acknowledge that I of my own accord wish to know more about LegalDeli for my own information and use. I further acknowledge that there has been no solicitation, invitation or inducement of any sort whatsoever from LegalDeli or any of its members to create an Attorney-Client relationship through this knowledge site. I further acknowledge having read and understood the Disclaimer below.

Disclaimer
About: This knowledge-site (www.LegalDeli.in) is owned and operated by LegalDeli (“NDA”), and is a resource for your informational and educational purposes only.

No Warranty: NDA does not warrant that any content or information contained on this knowledge-site is accurate, correct, complete or up-to-date, and hereby disclaims any and all liability to any person for any actual or threatened loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or otherwise. NDA assumes no liability for the interpretation and/or use of the content and/or information contained on this knowledge-site, nor does it offer any warranty of any kind, either expressed or implied in relation to such content or information.

Third-Party Links: NDA does not intend that links / URLs contained on this knowledge-site re-directing users to third party websites be considered as referrals to, endorsements of, or affiliations with any such third party website operators. NDA is not responsible for, and makes no representations or warranties, express or implied, about the content or information contained on such third party websites to which links may be provided on this knowledge-site.

No Legal Advice: By clicking ‘I agree’ and proceeding further, you acknowledge, represent and undertake that you on your own accord wish to know more about NDA, its capabilities and research content and information contained on the knowledge-site, for your own knowledge and personal use. The content and information contained on this knowledge-site should not be construed as nor relied upon as legal advice. You as a reader or recipient of content or information contained in this knowledge-site should not act, nor refrain from acting, based upon any or all of such content or information, but should always seek the advice of competent legal counsel licensed to practice the relevant law in the appropriate jurisdiction.

No Attorney-Client Relationship: This knowledge-site is not intended to be and you should not consider the content or information contained therein to be an advertisement, solicitation, inducement or invitation for an Attorney-Client relationship. Transmission, receipt or use of this knowledge-site, including content and information contained therein, does not constitute nor create an Attorney-Client relationship between NDA and you.

I Agree