Section 135 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 135 deals with three kinds of deal between a creditor and a principal debtor: a composition, a promise to give time, and a promise not to sue. Each discharges the surety, unless the surety assents. If you hold a guarantee or have stood surety and the creditor has arranged something with the borrower, our legal dispute resolution service can help you assess the position.
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. Three things must be present: a contract between creditor and principal debtor, one of the three kinds of promise, and no assent by the surety. Mere forbearance without a contract is covered by section 137, which comes out the other way.
The text
Section 135 reads: "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."
Surety, principal debtor and creditor are defined in section 126; see section 126.
The elements
| Element | Words of the section | Points to note |
|---|---|---|
| A contract | "A contract between the creditor and the principal debtor" | It must be a contract with the principal debtor. |
| Composition | "makes a composition with" | The text does not define "composition"; read plainly, an arrangement to accept less or something different in settlement of the debt. |
| Time | "promises to give time to" | A promise, not just waiting. |
| Not to sue | "promises ... not to sue" | A promise not to bring proceedings against the debtor. |
| Effect | "discharges the surety" | The surety's liability ends. |
| Exception | "unless the surety assents to such contract" | Assent by the surety saves the creditor's position. |
The section does not state a time limit within which the surety must assent, nor does it say the assent must be in writing. It simply says "assents".
Where section 135 sits among its neighbours
- Section 133 deals with variance in the terms of the main contract.
- Section 134 deals with release of the principal debtor.
- Section 135 (this article) deals with composition, giving time and agreeing not to sue, by contract.
- Section 136 deals with giving time through a contract with a third person, and section 137 with mere forbearance to sue; both leave the surety undischarged. See sections 136 to 138.
The Act prints no illustration under section 135 itself. The nearest illustrations are under section 134 (a composition with creditors) and section 136 (a contract to give time with a third person).
Reading sections 135 and 137 together
Section 137 says: "Mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision in the guarantee to the contrary, discharge the surety." Its illustration: B owes C a debt for which A is surety; the debt becomes payable; C does not sue B for a year; A is not discharged.
The difference is a promise versus plain inaction. Under section 135 the creditor makes a contract with the debtor, promising time or not to sue. Under section 137 the creditor simply does not act. The first discharges the surety unless he assents; the second does not discharge him.
A modern example of our own
Kavita lends money to Ramesh's firm, and Imran is surety for repayment. On the due date Ramesh asks for more time, and Kavita signs a letter agreeing not to demand repayment for six months. Imran does not know. Under section 135 this is a contract by which the creditor promises to give time to the principal debtor, so Imran is discharged unless he assents to it. If Imran had signed the letter as well, or later agreed in writing, the exception would apply.
Compare: Kavita simply lets the due date pass for six months without a promise to Ramesh and without suing. Section 137 treats that as mere forbearance, which does not discharge Imran unless the guarantee itself provides otherwise.
What can the parties change?
The "unless the surety assents" wording is the Act's own opening for the surety to keep his liability alive. Section 137 expressly recognises that the guarantee may contain a provision to the contrary. Section 135 contains no such words, so this article does not suggest that a clause in the guarantee can alter it; the text is silent on this, and a drafted clause should be reviewed with advice. Creditors commonly seek the surety's written assent at the time of any change, which is the safest way to rely on the exception in the section.
Practical points
- Creditors: before agreeing an extension, a settlement or a standstill with the borrower, obtain the surety's assent and keep it in writing.
- Sureties: if you receive a request to assent, read what exactly you are being asked to agree to. Your assent keeps your liability alive.
- Borrowers: a request for time is a contract of the kind section 135 describes; the surety's position may be affected.
- Keep dates on every document so it is clear what was promised and when.
Need help with an extension or settlement involving a guarantee?
Where a creditor has agreed something with the borrower, whether the surety is discharged depends on the exact promise made and on whether the surety assented. Our legal dispute resolution team can review the correspondence and the guarantee and explain how section 135 applies. Bring the guarantee, the loan papers and any letters about time or settlement.
Key takeaways
- A contract in which the creditor makes a composition with, promises time to, or promises not to sue the principal debtor discharges the surety (s.135).
- The surety is not discharged if he assents to that contract.
- Mere forbearance to sue is different and does not discharge the surety unless the guarantee says otherwise (s.137).
- The Act prints no illustration under section 135 itself.
Read next
- Section 134: discharge of surety by release or discharge of principal debtor
- Sections 136 to 138: forbearance and release of a co-surety
- Section 139: discharge of surety by creditor's act or omission
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.