Inapplicability of 'see to it' guarantee concepts to simple fund infusion covenants

While English common law recognizes a 'see to it' guarantee as an obligation whereby the guarantor promises to ensure that the principal debtor will perform its primary obligations, rendering the guarantor immediately in breach upon the debtor's failure, this concept does not extend to an arrangement where an entity merely promises to enable or assist the debtor in performing its covenants. Section 126 of the Indian Contract Act mandates that the surety perform the promise or discharge the liability of the third person, which necessitates a direct performance or discharge. An obligation merely to arrange financial resources or infuse capital into the borrower company does not satisfy the statutory mandate of Section 126 and cannot be treated as a guarantee under Indian law. (UV Asset Reconstruction Company Limited Vs Electrosteel Castings Limited | 2026 INSC 14)