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18. Chapter VIII, Sections 124 to Section 147 of the Act, 1872 deals with indemnity and guarantee. Section 126 of the Act defines 'contract of guarantee', 'surety', 'principal debtor' and 'creditor'. Section 128 of the Act deals with 'surety's liability' which states that liability of the surety is co-extensive with that the of the principal- debtor, unless it is otherwise provided by the contract. Section 129 is with regard to 'Continuing guarantee' - A guarantee which extends to a series of transactions is called a 'continuing guarantee'. Section 130 of the Act provides for 'revocation of continuing guarantee'. The surety could revoke the continuing guarantee at any time as to future transactions, by notice to the creditor. Sections 133 and 139 deals with 'discharge of surety by variance in terms of contract' and 'discharge of surety by creditor's act of omission impairing surety's eventual remedy'.

24. Under the above Clause, the guarantors have consented for making any variance which the Bank may think fit in terms of the contract with the principal. Further, they have agreed that they shall not be entitled to any of the rights conferred on sureties by Sections 133, 134, 135, 139 and 141 of the Contract Act.

25. The Debts Recovery Tribunal at Bengaluru on examination of the material, both oral and documentary held that defendant No.6 is liable to pay as per guarantee agreements Ex.A23 and Ex.A24 and defendant No.7 is liable under guarantee agreements Ex.A132 and Ex.A.133. The Tribunal has rightly come to the conclusion that defendant No.6 is liable under Ex.A23 and Ex.A24 and defendant No.7 as per Ex.A132 and Ex.A133. But the DRAT absolved defendants No.6 and 7 of the liability holding that since subsequent guarantors executed guarantee agreements which amounts to variance of the original contract and also on the ground that the claim of the Bank in respect of defendant No.6 is barred by time. The said finding of the DRAT would not stand to reasons and legal scrutiny in view of the nature of guarantee executed by 6th and 7th defendants. It is an admitted fact that the 6th defendant executed Ex.A23 and Ex.A24 for a sum of Rs.76,00,000/- and Rs.4,70,000/- respectively. The guarantee executed by the 6th defendant as noted above is a continuing guarantee. As per Ex.D7 and Ex.D8 it is clear that the defendant No.6 has requested the Bank to relieve him from the liabilities as guarantor for the loans advanced to the Company. The petitioner/Bank has replied stating that the matter is taken up to their higher authorities with regard to relieving him from the liability as guarantor for the credit facilities granted to the Company and have stated that they would communicate in the matter after hearing from the higher authorities in this regard. Further, most importantly they have stated that the liability continues to exist as guarantor. This would make it clear that the defendant No.6 is not relieved of his liability as requested by him and it is stated that it would continue to exist. But, defendant No.6 would not be liable for the future transactions and credit facility extended to the Company and he would be liable as guarantor only in respect of guarantee deeds at Ex.A23 and Ex.A24 in view of Section 130 of the Act which provides for revocation of guarantee for future transactions. Defendant No.6 would be liable under Ex.A23 and Ex.A24 since he has not been specifically relieved of his liabilities by the petitioner-Bank. Further, the finding of the DRAT that, since subsequent guarantor executed guarantee deed, there is variance and defendants No.6 and 7 are extinguished of his liability would not stand to reasons. Section 62 of the Act provides for novation. Section 62 reads as follows: