The Indian Contract Act, 1872
140. Rights of surety on payment or performance –
Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor.
Comments
A guarantor will get invested with all the rights which the creditor had only “upon payment or performance of all that he is liable for”. A guarantor is liable for any payment or performance of any obligation only to the extent the principal debtor has defaulted; C.K. Aboobacker v. K.P. Ayishu, AIR 2000 Ker 29 (NOC).
