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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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Similar questions

Q. A surety may be discharged form liability :
X. By notice of revocation of guarantee.
Y. On the failure of payment by the main creditor.
Z. If the creditor does any act which is against the right of the surety.

Q. When a surety has paid more than his share of debt to the creditor, he has a right of contribution from the co-securities who are equally bound to pay with him.

Q. A continuing guarantee may be revoked by the surety at any time, as to _______, by notice to the creditor.

Q. Identify which of the following statement is true and which is false?
P. A surety is favoured creditor.
Q. The liability of the principal debtor is co-extensive with that of surety unless the contract otherwise provides.
Select the correct answer from the options given below -

Q. After discharging the debt, the surety ________.

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