Legal Updates (July 06 – July 11, 2026)
CASE UPDATES
Telecom Regulatory Authority of India (TRAI) can validly regulate advertisement duration on television channels under its ‘quality-of-service’ powers once broadcasting falls within its regulatory domain, and such regulation can include a 12-minute per clock hour cap to protect viewer interest
The Delhi High Court in the case of 9X Media vs TRAI [W.P.(C) 7982/2013] dated July 08, 2026, has held that Telecom Regulatory Authority of India (TRAI) can validly regulate advertisement duration on television channels under its ‘quality-of-service’ powers once broadcasting falls within its regulatory domain, and such regulation can include a 12-minute per clock hour cap to protect viewer interest. The Court also held that this is a constitutionally valid, neutral and proportionate regulation of a licensed activity involving public spectrum, does not infringe Articles 14 and 19, and is in any case supported by the constitutional principles in Articles 39(b) and 39(c) read with Article 31-C.
The Court observed that TRAI had the statutory competence to frame the impugned regulation under Sections 11(1)(b)(v) and 36 of the TRAI Act, 1997. It said that once broadcasting and cable services were included within the definition of telecommunication services, TRAI’s quality of service jurisdiction extended beyond purely technical matters and legitimately included viewer experience. The Court found that in television broadcasting, the frequency and duration of advertisement breaks directly affect consumer viewing quality, and therefore regulating advertisement time was a valid quality of service measure.
The Court strongly emphasized that airwaves and spectrum are scarce public resources held by the State in trust for the public. Since broadcasters use public spectrum under a statutory and licensed regime, they cannot claim an unfettered right to commercially exploit it. The Court said the State is fully entitled to regulate such use in public interest so that the benefit of spectrum accrues to the community at large and not merely to private commercial entities.
On the constitutional challenge, the Court held that the broadcasters’ real grievance was about loss of advertisement revenue and not direct suppression of editorial or programme content. It therefore viewed the challenge principally through Article 19(1)(g), not the core of Article 19(1)(a). The 12-minute cap was treated as a neutral, time-based regulation that did not ban any category of speech or content, but merely limited the quantity of advertisement time in the interest of viewers. The Court added that Article 19(1)(g) does not guarantee profitability or unlimited monetisation of a public resource.
The Court also held that the uniform cap across channels, genres and time slots was based on a rational regulatory objective, namely preventing over-commercialisation and protecting viewer experience. It found that the framework was not manifestly arbitrary because it was based on consultation, consumer complaints and comparative international practice. The Court further held that TRAI was not required to accept every objection raised by industry stakeholders so long as the regulatory process showed transparency, rationality and application of mind.
Disputes between users and a private cryptocurrency exchange concerning withdrawal restrictions, cyber incidents and fund mismanagement remain private law disputes. Taxation of Virtual Digital Assets under the Finance Act does not, by itself, make such private entities “State” under Article 12
The Delhi High Court in the case of Amit Ranjan vs Union of India [LPA 393/2026] dated July 02, 2026, has held that disputes between users and a private cryptocurrency exchange concerning withdrawal restrictions, alleged cyber incidents and alleged fund mismanagement remain private law disputes, even if many investors are affected. Such disputes do not automatically acquire a public law character, and taxation or statutory recognition of Virtual Digital Assets under the Finance Act does not, by itself, make such private entities “State” under Article 12 or subject them to writ scrutiny on that basis.
The Court further held that where reliefs such as release of funds and compensation require adjudication of disputed facts, evidence, proof of loss, culpability and quantification, those issues must be pursued before civil courts or other competent fora, and not through writ proceedings under Article 226. A direction for CBI or SIT investigation also cannot be granted in the absence of exceptional circumstances.
The Court agreed with the core view of the Single Judge, and observed that the dispute was essentially between individual customers and a private cryptocurrency exchange over a cyber incident, withdrawal restrictions and alleged fund mismanagement. The Court said that merely because a large number of investors were affected, the dispute did not become one involving enforceable public law rights. It also held that private cryptocurrency entities do not become “State” under Article 12 simply because VDAs are taxed under the Finance Act.
On the relief for release of funds, the Court observed that such a claim would require factual examination of the amount standing to the credit of each investor and whether the withdrawal restrictions were protective measures or amounted to mismanagement. On the compensation claim, the Court held that proof of loss, culpability and quantification would all require evidence and trial. For that reason, both claims were held to be unsuitable for summary adjudication under Article 226.
Where settlement terms in a Section 138 NI Act matter expressly provide that legal remedies are only temporarily suspended, subject to honouring of settlement cheques, then the original complaint does not automatically stand extinguished merely because a later settlement was executed
The Delhi High Court in the case of Anil Sayal vs Apace Transco Pvt Ltd [CRL.M.C. 1016/2020] dated July 01, 2026, has held that where settlement terms in a Section 138 NI Act matter expressly provide that legal remedies are only temporarily suspended, subject to the complaint already filed under Section 138, and further provide that withdrawal of complaints will happen only upon honouring of settlement cheques, the original complaint does not automatically stand compounded, extinguished, or subsumed merely because a later settlement was executed. In such a case, continuation of the original complaint is legally permissible, particularly where no payment has been made and the later settlement cheques were never encashed.
The Court clarified that the observation laid down by the Apex Court in the case of Gimpex Pvt. Ltd. v. Manoj Goel [2021 SCC OnLine SC 925] applies only where the settlement wholly replaces the original cause and gives rise to a fresh and separate Section 138 cause of action, leading to an impermissible parallel prosecution. It does not apply where the settlement itself preserves the pending complaint and only keeps it in abeyance pending performance. The Court also clarified that disputes over interpretation of such settlement terms are factual matters not fit for quashing under Section 482 CrPC unless the defence is based on unimpeachable material.
The Court reiterated the settled position that quashing of a complaint under Section 138 NI Act at a pre-trial stage is an exception, and can be done only where the accused produces unimpeachable material showing that no offence is made out. Referring to Rathish Babu Unnikrishnan v. State (NCT of Delhi) [2022 SCC OnLine SC 513], the Court said that where factual controversy exists and the statutory presumption under the NI Act operates, the High Court should be slow to scuttle criminal proceedings before trial.
On examining the consent terms, the Court found that both documents expressly stated that the parties’ legal rights and remedies were only “temporarily suspended” and that such suspension was “subject to the action already taken U/s 138”. The consent terms also stated that criminal complaints would be withdrawn only if the post-dated cheques issued under the settlement were honoured. Prima facie, therefore, the settlement documents did not automatically wipe out or extinguish the pending NI Act complaint; rather, they contemplated that the complaint would be kept on hold pending payment.
The Court found that the settlement terms themselves preserved the earlier Section 138 proceedings and only kept them in abeyance. Further, the security cheques issued under the later consent terms were never presented for encashment, so there were no second prosecution and no duplication of criminal proceedings. The Court also observed that the offence under Section 138 is complete once the cheque is dishonoured, and a later assignment or transfer of debt to a sister concern does not by itself invalidate the original liability, especially where the settlement itself preserves recourse against the original accused and no amount has actually been paid to the complainant.
A rights issue that does not comply with the mandatory timing and procedural requirements under company law, and which is structured in a way that reduces majority shareholders into a minority and transfers control, constitutes oppression under Sections 241 and 242 of the Companies Act, 2013
The Hyderabad Bench of the National Company Law Tribunal (NCLT) in the case of Ashok Kumar Mandhani vs MBG Commodities Pvt Ltd [IA(CA)/304/2025] dated June 16, 2026, has held that service of notice for a general meeting is a mandatory statutory requirement, and where an EGM is convened without proper proof of service on substantial shareholders, the meeting and resolutions passed thereat are liable to be set aside. Further, a rights issue that does not comply with the mandatory timing and procedural requirements under company law, and which is structured in a way that reduces majority shareholders into a minority and transfers control, constitutes oppression under Sections 241 and 242 of the Companies Act, 2013.
The Tribunal noted the legal threshold under Sections 242(1)(a) and 242(1)(b), namely that oppression or mismanagement must be proved and that circumstances should justify winding up on just and equitable grounds, though relief can be moulded to avoid winding up. It also held that the petitioners were entitled to maintain the petition as members satisfying the statutory requirement under Section 244 of the Companies Act.
The Tribunal also found procedural illegality in the rights issue itself. It recorded that the issue opened on June 19, 2025 and closed on June 27, 2025, remaining open for only eight days, contrary to the minimum period under Section 62(1)(a). It further noted that the letter of offer was dispatched on June 17, 2025 for an issue opening on June 19, 2025, which did not satisfy the regulatory requirement referred to by the Tribunal for dispatch at least three days before opening.
A major factual circumstance noted by the Tribunal was that on the very first day of the issue, Respondent No. 5 subscribed not only to her entitlement but also applied for the large unsubscribed balance which could have become available only after expiry of the offer period and non-subscription by others. The Tribunal treated this as showing that the allotment process was pre-arranged and contrived. It held that the cumulative effect of these facts showed contravention of mandatory requirements governing a rights issue.
Regulation 29 of the IBBI (Liquidation Process) Regulations, 2016 permits set-off only in case of mutual dealings between the same corporate debtor and the same other party. It does not permit cross-adjustment of claims involving separate group companies, even if they belong to the same industrial group or were handled by the same liquidator
The New Delhi National Company Law Appellate Tribunal (NCLAT) in the case of Assam Power Distribution Company vs Meena Sureka [Company Appeal (AT) (Insolvency) No. 1205 of 2025] dated July 03, 2026, has held that Regulation 29 of the IBBI (Liquidation Process) Regulations, 2016 permits set-off only in case of mutual dealings between the same corporate debtor and the same other party. It does not permit cross-adjustment of claims involving separate group companies, even if they belong to the same industrial group or were handled by the same liquidator. Separate legal identity continues to apply throughout CIRP and liquidation, and recoveries/distributions must remain entity-specific under the IBC framework.
The Court also reinforced that the “group of companies” argument cannot be used to bypass the basic principle that each company in insolvency is treated as a separate legal person unless the Code itself provides otherwise. Administrative convenience, shared communication, common office address, or common insolvency professional do not erase this distinct legal identity. As a result, a creditor must pursue its admitted claims in each liquidation separately and can only receive distribution under Section 53 from the relevant liquidation estate.
On Regulation 29, the Tribunal made it clear that set-off is available only where there are mutual dealings between the corporate debtor and the same counterparty. It cannot be invoked to adjust sums allegedly owed by third-party group entities against money payable to the present corporate debtor. Since the appellant was seeking to club liabilities of different companies, and those companies had also undergone separate proceedings and dissolution, the plea of set-off was rejected.
The Tribunal also noted that the load security deposits of each entity were separately maintained, electricity bills were separately raised for each unit, and even the appellant’s own claim form before the IRP recorded “N/A” against the column dealing with mutual credits, mutual debts, or mutual dealings available for set-off. This materially weakened the later attempt to argue for a group-wide adjustment mechanism.
The NCLAT further accepted the liquidator’s justification for the calculation of the refundable amount and observed that the adjustment of the load security deposit was in consonance with the applicable electricity supply code. It also held that the appellant’s reliance on provisions of the Electricity Act could not override the Insolvency and Bankruptcy Code because Section 238 of the IBC gives the Code overriding effect in case of inconsistency.
In a copyright action involving logos, mere visual resemblance and prior adoption are not enough to justify interim relief. The plaintiff must show a reasonable possibility of access and a prima facie causal link between its work and the defendant’s work
The Bombay High Court in the case of Atyati Technologies Private Limited vs Cognizant Technology Solutions [Interim Application (L) No. 7958 of 2024] dated July 07, 2026, has clarified that in a copyright action involving logos, mere visual resemblance and prior adoption are not enough to justify interim relief. The plaintiff must show a reasonable possibility of access and a prima facie causal link between its work and the defendant’s work; if the defendant produces persuasive material showing independent creation, the inference of copying is displaced. Here, although the logos resembled each other in adopting a hexagonal device, Cognizant’s evidence of a substantial and documented design process, coupled with the absence of material showing reasonable access to Atyati’s logo, defeated the copyright claim at the interim stage.
On passing off, the Court held that reverse passing off is maintainable in principle under Section 27(2) of the Trade Marks Act and ordinary passing off principles can cover a case where a junior but stronger market player overwhelms a senior user. However, the plaintiff must still establish the classic trinity of goodwill, misrepresentation, and damage. Since Atyati failed to show protectable goodwill in its standalone logo and the relevant consumers were sophisticated institutional buyers unlikely to be confused, no prima facie case of passing off or reverse passing off was made out.
On copyright ownership, the Court held that Atyati had prima facie established ownership of copyright in the ATYATI logo. Cognizant had tried to weaken this by referring to an allegedly similar Spanish logo from 2015, but the Court said that mere existence of a similar logo somewhere in the world was not enough. What mattered was copying. Since there was no pleading or material to show that Atyati had a reasonable opportunity to view and copy the Spanish logo, the Court was not willing to reject Atyati’s originality at this stage only on the basis of archived internet screenshots.
On similarity, the Court accepted that there was resemblance between the ATYATI logo and Cognizant’s logo because both used a similar hexagonal-shaped device. At the same time, it noted differences such as colour contrast, orientation, and presentation. The Court emphasised the settled principle that copyright protects the form and expression of an idea, not the idea itself, and that resemblance by itself is not enough unless it crosses into actionable copying.
The Court found that the underlying concept in both logos involved a geometrically structured expression connected to the alphabet “C”, but said that when a similar idea is expressed in a geometric hexagonal form, some similar reflections may naturally occur. It therefore treated the case as one where resemblance had to be examined alongside access and causal connection, not in isolation.
The Court also held that Atyati had failed to show that Cognizant had a reasonable opportunity to view Atyati’s logo. Mere public availability of the logo, Atyati’s prior adoption, Cognizant’s business presence in India, or the fact that many Cognizant employees were Indian nationals was not enough. The Court said access cannot be inferred from bare possibility or speculation; there must be a chain of circumstances showing exposure, availability, and opportunity. That chain was missing here. As a result, the Court held that Atyati’s copyright infringement case failed at the interim stage.
Where, upon amalgamation under Section 45 of the Banking Regulation Act, the original tenant ceases to exist and the tenancy rights and possession of the rented premises vest in another entity without the landlord’s written consent, Section 14(1)(b) of the Delhi Rent Control Act is attracted
The Supreme Court in the case of British Motor Car Company vs Hindustan Commercial Bank [Civil Appeal No. 5714 of 2012] dated July 09, 2026, has held that where, upon amalgamation under Section 45 of the Banking Regulation Act, the original tenant ceases to exist and the tenancy rights and possession of the rented premises vest in another entity without the landlord’s written consent, Section 14(1)(b) of the Delhi Rent Control Act is attracted. The Court clarified that the provision does not carve out any exception for involuntary or statutory transfers under an administrative scheme.
According to the Court, Section 14(1)(b) covers every mode by which tenancy rights or possession pass from the original tenant to another entity, including involuntary transfers. It reiterated that the law does not distinguish between voluntary and involuntary transfers, and that the reasons behind the transfer are irrelevant once the factual situation of assignment or parting with possession is established.
The Court found that once the amalgamation took effect on Dec 19, 1986, HCB ceased to exist and all its rights, liabilities, assets, and interests, including tenancy rights in the premises, stood vested in PNB. As a result, HCB had parted with possession and PNB had come to occupy the premises. Since this transfer admittedly took place without the landlord’s written consent, both ingredients of Section 14(1)(b) stood satisfied. The Court therefore rejected the respondents’ argument that a transfer under a banking amalgamation scheme should be treated differently merely because it was not voluntary.
The Court also rejected the argument that a scheme framed under Section 45 of the Banking Regulation Act should be treated as having overriding statutory force. Rather, it held that the scheme-making process under Section 45 is administrative in nature, not legislative. Therefore, such a scheme cannot be treated as a statutory enactment capable of overriding Section 14(1)(b) of the Delhi Rent Control Act.
What matters is the factual transfer of tenancy rights and possession to a different entity without written consent, not the reason or manner in which that transfer occurred. Accordingly, the Supreme Court restored the eviction decree passed by the Additional Rent Control Tribunal.
A one-time settlement does not extinguish the underlying financial debt in an absolute sense when the settlement is conditional. If the borrower breaches the OTS terms and the settlement stands withdrawn in accordance with its terms, the financial creditor is entitled to revive and claim the entire dues under the original loan arrangement
The New Delhi National Company Law Appellate Tribunal (NCLAT) in the case of Gaurav Jaiswal vs Indian Renewable Energy Development Agency Limited [Company Appeal (AT) (Insolvency) No. 594 of 2025] dated June 30, 2026, has clarified that service of a Section 7 IBC petition on the corporate debtor’s registered email address available in MCA records constitutes valid and sufficient service, particularly when accompanied by attempts at service at the registered office and publication in accordance with the NCLT Rules. The NCLAT said that a corporate debtor cannot later challenge an ex parte admission order on grounds of non-service where it has failed to maintain or update its statutory contact details.
The Tribunal also laid down that for admission of a Section 7 application, the Adjudicating Authority is concerned only with the existence of financial debt and default above the statutory threshold. Even where the principal is said to have been paid, a default consisting of unpaid interest can sustain Section 7 proceedings if the amount exceeds the threshold limit under the Code.
Further, the NCLAT held that a one-time settlement does not extinguish the underlying financial debt in an absolute sense when the settlement is conditional. If the borrower breaches the OTS terms and the settlement stands withdrawn in accordance with its terms, the financial creditor is entitled to revive and claim the entire dues under the original loan arrangement.
The Tribunal rejected the argument that the Section 7 proceedings were vitiated for want of notice. It observed that service of the petition had been effected on the registered email address of the corporate debtor as reflected in MCA records, and that such service is valid and sufficient under the NCLT Rules, 2016. The Tribunal also noted that service had been attempted at the registered office and later through publication, and therefore the plea of violation of natural justice could not be accepted.
The Tribunal emphasized that under Section 12 of the Companies Act, 2013, the burden lies on the company to maintain a functional registered office capable of receiving notices and to update MCA records if its office changes. The corporate debtor could not take advantage of its own failure to keep its registered office and contact details operative.
The Tribunal also rejected the submission that IBC could not be invoked because the matter should have gone before the DRT or because only interest remained unpaid. It held that the Code is a self-sufficient legislation and there is no legal bar to initiating Section 7 proceedings for default in payment of interest, provided debt and default are established.
If promoters of a company in liquidation procure mutation of company-owned immovable property into their own names, without any transfer instrument, without disclosed or valid consideration, and in circumstances showing that the asset has been taken out of the company estate to the detriment of creditors, the transaction attracts Section 531(1) of the Companies Act, 1956 as a fraudulent preference and is void
The Bombay High Court in the case of Indage Vineyard Pvt Ltd vs Kotak Mahindra Bank [Official Liquidator Report No. 34 of 2025] dated June 25, 2026, has held that where promoters of a company in liquidation procure mutation of company-owned immovable property into their own names, without any transfer instrument, without disclosed or valid consideration, and in circumstances showing that the asset has been taken out of the company estate to the detriment of creditors, the transaction attracts Section 531(1) of the Companies Act, 1956 as a fraudulent preference and is void.
The Court made it clear that even if the promoters later contend that there was “no valid transfer at all,” that does not save the transaction. On the contrary, such a stance supports the conclusion that the mutation entries were illegal and required reversal. The Court treated the mutation-based transfer itself as sufficient interference with the company’s title and with creditors’ rights to justify nullification.
The Court observed that Section 531(1) creates a deeming fiction: a transfer made within six months before commencement of winding up can be treated as a fraudulent preference if it would have had that character in insolvency law. It emphasised that the purpose of the provision is to protect creditors, and that the assets of a company are not the assets of its shareholders or promoters.
The Court found several suspicious features in the transaction. There was no transfer deed, no disclosed consideration, no valuation of the property, and no disclosure of the amount allegedly owed by the company to the promoters. The promoters had claimed the property was transferred because they had lent money to the company, but the record did not reveal the quantum of debt or how it compared with the value of the land. The Court also noted that the shareholder resolution relied upon was itself questionable, including because Section 293(1)(a) would ordinarily apply to public companies and the resolution mentioned no value for the related party transfer.
The Court further observed that the promoters had effectively “helped themselves” to company property without stated consideration, thereby materially eroding the pool of assets available to creditors in liquidation. Their conduct in getting the land mutated in their names without any transfer instrument, and then attempting to sell it to third parties in 2023, showed that they had enjoyed and dealt with the property as their own, creating a real risk of putting the asset beyond the reach of creditors.
The Court held that the absence of consideration itself demonstrated absence of good faith, and that the only reasonable conclusion was that the promoters had sought to place the property beyond the reach of creditors. The Court also rejected the argument that, because there was no transfer instrument, there was no transfer to invalidate. It held that a transfer sought to be effected by mutation entries also falls within the mischief of Section 531(1), especially where those entries had the effect of securing title in favour of the promoters without lawful documentation.
Section 36AAA of the Banking Regulation Act does not require RBI to grant a personal hearing before superseding the Board of a co-operative bank, because the Legislature deliberately omitted such a requirement from that provision while expressly including it in Section 36AA
The Kerala High Court in the case of M.P Jackson vs Reserve Bank of India [WP(C) No. 3275 of 2026] dated July 03, 2026, has held that Section 36AAA of the Banking Regulation Act does not require RBI to grant a personal hearing before superseding the Board of a co-operative bank, because the Legislature deliberately omitted such a requirement from that provision while expressly including it in Section 36AA. Secondly, the proviso to Section 36AAA(1) makes consultation with the concerned State Government mandatory, and consultation only with the Registrar of Co-operative Societies is not sufficient compliance. Any order passed without such consultation is legally unsustainable.
The Court also affirmed that RBI is legally competent to supersede the managing committee of a co-operative bank under the Banking Regulation Act even if that committee is democratically elected under the State co-operative law. The Court observed that although orders causing civil consequences ordinarily attract the requirement of a hearing, the statutory scheme here was different. It noted that Section 36AA expressly provides a reasonable opportunity of representation before removal of managerial persons, whereas Section 36AAA, dealing with supersession of the Board of a co-operative bank, contains no such requirement. The omission was treated as deliberate, and the Court held that a hearing cannot be read into Section 36AAA.
On the consultation requirement, the Court drew a clear distinction between the “State Government” and the “Registrar of Co-operative Societies.” It held that while the Registrar may be a competent officer in matters concerning co-operative societies, consultation with the Registrar is not the same as consultation with the State Government when the statute specifically requires consultation with the State Government. The Court said that where a statute prescribes that an act must be done in a particular manner, it has to be done in that manner alone.
On RBI’s power to supersede an elected committee, the Court rejected the petitioner’s democratic-governance objection. It held that in the case of co-operative societies carrying on banking business, the Banking Regulation Act also applies, and RBI has independent authority under Section 36AAA to supersede the Board of Directors. The democratic structure under the Kerala Co-operative Societies Act does not immunise a co-operative bank from RBI action under the central banking law.
A personal guarantee expressly drafted as a continuing and irrevocable guarantee does not stand discharged merely because the guarantor resigns as director of the corporate debtor. Revocation of such guarantee under Section 130 of the Contract Act requires notice to the creditor and operates only prospectively
The New Delhi National Company Law Appellate Tribunal (NCLAT) in the case of Nakul Gupta vs State Bank of India [Company Appeal (AT) (Insolvency) No. 494 of 2024] dated July 06, 2026, has held that a personal guarantee expressly drafted as a continuing and irrevocable guarantee does not stand discharged merely because the guarantor resigns as director of the corporate debtor. Revocation of such guarantee under Section 130 of the Contract Act requires notice to the creditor and operates only prospectively.
The Tribunal also reinforced that where the creditor’s claim and debt trace back to the original loan and guarantee documents, the guarantor cannot avoid insolvency proceedings by arguing that later renewals automatically extinguished the original guarantee, especially when the guarantee itself states that future variations do not affect liability.
The Tribunal examined the nature of the 2017 deed of guarantee and accepted SBI’s submission that the guarantee was continuing and irrevocable. The Tribunal noted that under the guarantee, the guarantor’s liability was payable on demand, the guarantor was deemed to be principal debtor for enforcement purposes, and the guarantee was expressly stated to continue notwithstanding disputes between the bank and borrower. The Tribunal further held that, renewal of the working capital facilities by SBI did not amount to novation or such variance as would discharge the guarantor under Sections 62 or 133 of the Contract Act. Even otherwise, Section 133 discharges the surety only as to transactions subsequent to the variance, while liability for earlier debt continues.
On the resignation point, NCLAT held that merely stepping down as director did not discharge Nakul Gupta from his obligations under the guarantee. The Tribunal emphasised that a continuing guarantee under Section 129 extends to a series of transactions and that revocation under Section 130 can operate only for future transactions and only upon notice to the creditor. It found that no such notice of revocation had been issued to SBI.
The Tribunal also agreed with the Adjudicating Authority’s view that even if there was an increase in sanction limits without the guarantor’s consent, the guarantor would still remain liable for the debt existing prior to such variance.
While discussing Section 133 of the Contract Act, NCLAT reiterated the legal principle that variance without the surety’s consent discharges the surety only for transactions subsequent to the variance, and not for transactions already covered. It added that the debt registered with the Information Utility flowed from the loan and guarantee documents of Oct 17, 2017, and the NeSL material did not show any fresh debt arising from a separate unguaranteed facility under the Jan 01, 2019 renewal.
