Negotiable Instruments Act Section 39 — Suretyship

CHAPTER III PARTIES TO NOTES, BILLS AND CHEQUES.

General

Summary

If the person holding an accepted bill of exchange makes a deal with the acceptor that would normally release the other people responsible for the bill, the holder can still keep their right to hold those other people liable by clearly stating that they are doing so. If the holder makes this express reservation, those other parties remain responsible and are not released from their obligations.

Official Text

When the holder of an accepted bill of exchange enters into any contract with the acceptor which, under section 134 or 135 of the Indian Contract Act, 1872 (9 of 1872), would discharge the other parties, the holder may expressly reserve his right to charge the other parties, and in such case they are not discharged.