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Debenture Redemption Reserve

On payment of...

Question

On payment of a guaranteed debt, surety is subrogated to all the rights of _______.

A

Creditor

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B

Principal debtor

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C

Other co-surety

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D

None of the above

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Solution

The correct option is A Creditor
After the payment of the debt to the creditor, the surety is subrogated to the rights of the creditor i.e., he has the same rights as those of the creditors. Therefore, he can sue the principal debtor to exercise those rights. Thus if the surety has performed his promise towards the creditor, all the rights of the principal debtor against the creditor devolve upon him.

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