MCB BANK LIMITED vs UZMA TEHREEM — 2026 CLD 493 SUPREME-COURT

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MCB BANK LIMITED VS UZMA TEHREEM. S. 133---Financial Institutions (Recovery of Finances) Ordinance (XLIV of 2001), S. 9---Discharge of surety by variance in terms of contract---Scope---Record (Letter of Guarantee etc.) revealed that guarantee furnished by respondent as one of the directors of customers/company (respondent) in pursuance of 2nd renewed running finance facility to secure all amounts becoming due or payable by customers/company (respondent) was continuing with consent of director (respondent) and the same did not stand discharged under Section 133 of the Contract Act, 1872, due to variance in terms of contract i.e. execution of relevant restructuring agreement which had also been signed by director (respondent) as a guarantor---If variation or composition of the loan or time etc. as to its repayment was allowed by the creditor to the borrower and consent/assent in advance thereto was given by the guarantor in the letter of guarantee, subsequent to the date of guarantee, such variation, composition, extension, change or indulgence being within the contemplation of the parties at the time of execution of guarantee did not affect discharge of the surety/guarantee from obligations under the guarantee---And as such, surety continued to be bound by the terms of the guarantee despite moratorium, enlargement of time, composition and variations between the creditors and principal borrower---Since no substantial question of facts or law, requiring evidence to be recorded, had arisen of respondents (customers/company), therefore, there was no occasion for the High Court to grant respondents leave to defend the suit vide impugned judgment---Supreme Court set-aside impugned judgment and decree passed by the Appellate/High Court in favour of respondent/customer, being barred by time and having no merits---Appeal, filed by bank, was allowed.

MCB BANK LIMITED vs UZMA TEHREEM — 2026 CLD 493 SUPREME-COURT

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