Rights of Surety or Warranty against Creditor
1. Rights in case of fidelity guarantee:-
In the event of a fidelity guarantee, that is, a guarantee of good behavior, honesty, etc., of the main debtor, the guarantee may ask the employer to dispense with the services of the employee if it is shown that the latter is dishonest.
2. Before the payment of the guaranteed debt:-
A collateral may, after the debt has expired, but before you are asked to pay, require the creditor to sue the principal debtor to recover the debt. But, in such cases, the guarantee must commit to indemnify the creditor for any risk, delay or expense resulting from it.
3. Right to claim securities:-
After the payment of the debt to the creditor or the fulfillment of the promise of the main debtor, the guarantee can recover all the values that the creditor had with him before or after the signing of the guarantee contract. This right is available to guarantee whether or not he knows about the existence of such security. You are entitled to all of them.
4. Equity law:-
After paying the amount owed to the creditor, the collateral is entitled to all of the creditor's actions that he had against the debtor, as well as to any other person regarding the debt.
5. Right of compensation:-
Sometimes the primary debtor is entitled to certain counterclaims or deductions from the loan obtained from the creditor. In such cases, the collateral is entitled to the benefit of such counterclaim or deductions, if the creditor files a claim against the collateral.
Rights of Surety against the
Principal Debtor
1. Right of Subrogation:-
After payment of the debt to the creditor,
the guarantee is subrogated to the rights of the creditor, that is, he has the
same rights as those of the creditors. Therefore, you can sue the main debtor
to exercise those rights. Therefore, if the collateral has fulfilled its
promise to the creditor, all of the principal debtor's rights against the
creditor rests with him.
2. Right to
compensation:-
In each collateral contract, the primary
debtor has an implicit promise to indemnify the collateral, that is, to clear
the collateral. Therefore, after payment of the principal debtor's debt, the
collateral is entitled to recover from the principal debtor, the entire amount,
including interest plus costs properly paid to the creditor under the
collateral. The reason is that the guarantee is entitled to full compensation.
3. Right to
be released before:-
A guarantee can, even before making any
payment, compel the debtor to release him from liability by paying the debt.
But, before doing so, the debt must be determined.
Rights of Surety against Co-guarantee or Co-sureties
When two or more people guarantee the same debt, they are called co-guarantors. All of them are equally responsible for repaying the debts of the creditors. Unlike other co-guarantors, the rights of a co- sureties are as follows:
1. The Right to contribute equally:-
If two or more persons co- sureties for the same debt jointly or more, or under the same or different agreement and are unaware of each other or not, in the absence of any agreement, co-bail, equal share of the whole between each or every payment. For they are not as responsible as the main part.
Sometimes, a co-guarantee removes all liabilities. In this case, he can get equal contribution from other co-guarantors.
2. Co- Sureties liability bound to different aggregates:-
If the co-guarantees are bound in different numbers, they are liable to pay equally, but not more than the maximum amount guaranteed for each of them.
Example: Bail for A, B and CD, enter into three different bonds, each in the form of a fine of Rs. 5,000 as A, Rs. 10,000 as B, Rs. For E is conditional. D 15,000 has failed, A, B and C are each liable to pay Rs 5,000.
