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![1- Rights Against the Creditor:
• Right to get Securities: [Sec.
141]
If Surety makes payment to
creditor, surety can get all
securities into his possession from
creditor.](https://image.slidesharecdn.com/rightsofsurety-210123155418/75/Rights-of-surety-3-2048.jpg)
![• Rights of Subrogation: [Sec.140]
A surety steps in the shoes of the creditor. A
surety subrogate all the rights of the creditor
against the principal debtor. However, the
right is subject to the condition precedent that
the surety must have himself discharge
liabilities under the contract.
CONT……….](https://image.slidesharecdn.com/rightsofsurety-210123155418/75/Rights-of-surety-5-2048.jpg)
![CONT…….
• Right to Indemnity: [ Sec. 145]
In every contract of guarantee there is an implied
promise by the principal debtor to indemnify the
surety. Therefore, the surety is entitled to recover
from the principal debtor whatever sum he has
rightfully paid under the guarantee.](https://image.slidesharecdn.com/rightsofsurety-210123155418/75/Rights-of-surety-10-2048.jpg)
Rights of surety
The document outlines the rights of a surety against creditors, principal debtors, and co-sureties. Key rights include the right to obtain securities and set-off from the creditor, the right to indemnity from the principal debtor, and the right to subrogation, enabling the surety to step into the creditor's position. Additionally, a surety can seek dismissal of an employee under a fidelity guarantee if misconduct is proven.
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Rights of surety
- 1. RIGHTS OF SURETY CourseCo-Ordinator: Neetu Kushwaha
- 2. Surety gets variousrights against the following parties: • Against the Creditor • Against the Principal Debtor • Against the Co-sureties
- 3. 1- Rights Againstthe Creditor: • Right to get Securities: [Sec. 141] If Surety makes payment to creditor, surety can get all securities into his possession from creditor.
- 4. CONT……. • Right toask for Set- off: Surety can give advice to creditor to sell away the security and to utilize the amount thus realized for set off.
- 5. • Rights ofSubrogation: [Sec.140] A surety steps in the shoes of the creditor. A surety subrogate all the rights of the creditor against the principal debtor. However, the right is subject to the condition precedent that the surety must have himself discharge liabilities under the contract. CONT……….
- 6. CONT…. • Right toEquities: Upon discharge of the guarantee obligation, the surety is entitled to all the equities available to the creditor no only against the principal debtor but also against all persons claiming through him.
- 7. CONT……… • Right toDischarge: A surety has right to be discharged from the further obligation under the fidelity guarantee, if the misconduct or dishonesty of the employee is proved, for whom he has given guarantee.
- 8. CONT….. • Right todismissal of employee: In case of fidelity guarantee, a surety can ask the employer to dismiss the employee who has proved guilty of misconduct or dishonesty.
- 9. • Right ofSubrogation: Upon the discharge of the guarantee obligation, a surety steps into the shoes of the creditor. He gets all the rights of the creditor against the principal debtor. Thus, he is subrogated to all the rights of the creditor against the principal debtor. 2- Rights Against Principal Debtor
- 10. CONT……. • Right toIndemnity: [ Sec. 145] In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety. Therefore, the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee.