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unnikrishnan (branch manager)     20 July 2016

Right of subrogation

can surety who paid the guaranteed amount to creditor demand from creditor the security which is furnished by the principal debtor to the creditor? kindly reply


 6 Replies

JustAdvisor (IT)     21 July 2016

please read section 141 of Indian contract act. surety is entitled to benefit of such security.

unnikrishnan (branch manager)     21 July 2016

Sir what I am asking you is whether surety demand the security from bank or he files a suit against the principal debtor in the court.whether bank is obliged to pass the title deeds to surety which the principal debtor had mortgaged with the bank

JustAdvisor (IT)     21 July 2016

section 141 clearly mentions that if the creditor parts with the securities, the surety is discharged to that extent. hence creditor cannot return securities to principal debtor but has to endorse the securities to the surety who now stands in the shoes of the creditor.

JustAdvisor (IT)     21 July 2016



Halsbury's Laws of England, 4th Edn., Vol. 20, para 280, p. 52


Effect of loss of securities.-On paying the guaranteed debt the surety is entitled to have all securities held by the creditor for the debt handed over to him by the creditor in exactly the same state and condition in which they were originally provided whether they were in existence at the date of the contract of suretyship or came into existence subsequently.

unnikrishnan (branch manager)     22 July 2016

Thank you for the reply

unnikrishnan (branch manager)     22 July 2016

Thank you for the reply

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