https://www.taxtmi.com/caselaws?id=459157 Mere passive inaction by a creditor in failing to realise hypothecated security does not amount to losing or parting with security under section 141 of the Indian Contract Act, 1872, and therefore does not discharge a surety to the extent of the security's value. The note distinguishes this from an affirmative act by the creditor that actually deprives the surety of the benefit of security. Section 137 preserves the creditor's right to forbear or delay enforcement, while section 141 protects the surety only where the security held at the time of suretyship is lost or impaired by the creditor's act. On the stated facts, depreciation of the truck through non-realisation was treated as passive negligence, so the sureties remained liable. en-us Mon, 05 Jul 1976 00:00:00 +0530 Tue, 03 Dec 2024 10:19:22 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=459157 Mere passive inaction by a creditor in failing to realise hypothecated security does not amount to losing or parting with security under section 141 of the Indian Contract Act, 1872, and therefore does not discharge a surety to the extent of the security's value. The note distinguishes this from an affirmative act by the creditor that actually deprives the surety of the benefit of security. Section 137 preserves the creditor's right to forbear or delay enforcement, while section 141 protects the surety only where the security held at the time of suretyship is lost or impaired by the creditor's act. On the stated facts, depreciation of the truck through non-realisation was treated as passive negligence, so the sureties remained liable. Case-Laws Indian Laws Mon, 05 Jul 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=459157