Ran Banda and Others v. The People’S Bank – sllr 2004 volume 2 page 031

In the case between Ran Banda and Others (Plaintiffs) and The People’s Bank (Defendant), the court addressed whether a rescheduled loan agreement constituted a novation of the original contract, thereby extinguishing the initial debt and establishing a new legal obligation, and the associated enforceability of the original contract, particularly concerning the liability of guarantors. It was held that the rescheduled arrangement did not amount to novation and did not extinguish the original contractual obligations, but instead modified the repayment terms without releasing guarantors. The principle reaffirmed is that rescheduling a loan at a debtor’s request, providing concessions or additional time, does not substitute a new contract unless such intention is clear, and the original agreem