https://www.taxtmi.com/caselaws?id=101399 A contract of guarantee creates accessory liability, so a surety remains bound unless the principal debt is extinguished or the surety is otherwise discharged by contract or law. Under the nationalisation statute, the debtor's undertaking was transferred to the State and claims were to be paid through the statutory compensation mechanism, but unpaid or rejected liabilities were not wiped out. Liability was discharged only pro tanto to the extent of admitted and paid claims, and the guarantees preserved remedies. Mere forbearance, non-appeal, or dismissal of the suit against the principal debtor on the basis of an alternative statutory remedy did not discharge the sureties; the balance remained enforceable against them. en-us Wed, 12 Dec 1984 00:00:00 +0530 Thu, 09 Feb 2012 16:22:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=101399 A contract of guarantee creates accessory liability, so a surety remains bound unless the principal debt is extinguished or the surety is otherwise discharged by contract or law. Under the nationalisation statute, the debtor's undertaking was transferred to the State and claims were to be paid through the statutory compensation mechanism, but unpaid or rejected liabilities were not wiped out. Liability was discharged only pro tanto to the extent of admitted and paid claims, and the guarantees preserved remedies. Mere forbearance, non-appeal, or dismissal of the suit against the principal debtor on the basis of an alternative statutory remedy did not discharge the sureties; the balance remained enforceable against them. Case-Laws Companies Law Wed, 12 Dec 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=101399