Section 138 of Indian Contract Act, 1872 - Release of One Co-Surety Does Not Discharge Others

Section 138 deals with a guarantee involving two or more co-sureties. It preserves the creditor's rights against the co-sureties who have not been released and also preserves the released surety's responsibility toward the other co-sureties.

Updated: 20 September 2026

What Section 138 provides

Section 138 - Release of one co-surety does not discharge others.
Where there are co-sureties, a release by the creditor of one of them does not discharge the others; neither does it free the surety so released from his responsibility to the other sureties.

Meaning of Section 138

A surety is a person who gives a guarantee for the performance of a promise or discharge of a liability of a third person. Where more than one person guarantees the same debt or duty, they are commonly described as co-sureties.

Section 138 creates two connected rules. First, if the creditor releases one co-surety, that release does not by itself discharge the remaining co-sureties from their obligations to the creditor. Second, the co-surety who has been released by the creditor is not thereby freed from responsibility toward the other co-sureties.

Practical effect

If A, B and C are co-sureties for the same guaranteed obligation and the creditor releases A, Section 138 provides that B and C are not discharged merely because A was released. A's release by the creditor also does not, by itself, eliminate A's responsibility toward B and C as co-sureties.

Section 138 and contribution between co-sureties

The final words of Section 138 are important because they preserve the internal responsibility of the released surety toward the other sureties. The provisions concerning co-sureties should therefore be read together with the later provisions of the Indian Contract Act dealing with contribution among co-sureties.

Related provisions on guarantee

Section 138 forms part of the statutory scheme governing contracts of guarantee. For context, Section 126 defines a contract of guarantee, surety, principal debtor and creditor. Section 128 addresses the extent of a surety's liability. Sections 133 to 139 deal with circumstances relevant to discharge of a surety, including Section 137 and Section 139.

Key point

Release is not the same as discharge of all co-sureties. Under Section 138, the creditor's release of one co-surety does not automatically release the others, and the released surety's responsibility to fellow co-sureties is preserved.

Official text

The current central Act and the text of Section 138 may be checked on the Government of India's India Code portal: Indian Contract Act, 1872 - official PDF.