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Section 141 - Suretys right to benefit of creditors securities : Indian Contract Act 1872


What is Suretys right to benefit of creditors securities? Section 141 of Indian Contract Act 1872


 

Section 141 of Indian Contract Act 1872 : "Suretys right to benefit of creditors securities"

141. A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of suretyship is entered into, whether the surety knows of the existence of such security or not; and, if the creditor loses, or, without the consent of the surety, parts with such security, the surety is discharged to the extent of the value of the security.

Illustrations
(a) C advances to B, his tenant, 2,000 rupees on the guarantee of A. C has also a further security for the 2,000 rupees by a mortgage of B's furniture. C cancels the mortgage. B becomes insolvent, and C sues A on his guarantee. A is discharged from liability to the amount of the value of the furniture.

(b) C, a creditor, whose advance to B is secured by a decree, receives also a guarantee for that advance from A. C afterwards takes B's goods in execution under the decree, and then, without the knowledge of A, withdraws the execution. A is discharged.

(c) A, as surety for B, makes a bond jointly with B to C, to secure a loan from C to B. Afterwards, C obtains from B a further security for the same debt. Subsequently, C gives up the further security. A is not discharged.

 

INDIAN CONTRACT ACT 1872

Section 126 - Contract of guarantee surety principal debtor and creditor

Section 127 - Consideration for guarantee

Section 128 - Suretys liability

Section 129 - Continuing guarantee

Section 130 - Revocation of continuing guarantee

Section 131 - Revocation of continuing guarantee by suretys death

Section 132 - Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other's default

Section 133 - Discharge of surety by variance in terms of contract

Section 134 - Discharge of surety by release or discharge of principal debtor

Section 135 - Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor

Section 136 - Surety not discharged when agreement made with third person to give time to principal debtor

Section 137 - Creditors forbearance to sue does not discharge surety

Section 138 - Release of one co-surety does not discharge others

Section 139 - Discharge of surety by creditor's act or omission impairing surety's eventual remedy

Section 140 - Rights of surety on payment of performance

Section 141 - Suretys right to benefit of creditors securities

Section 142 - Guarantee obtained by misrepresentation invalid

Section 143 - Guarantee obtained by concealment invalid

Section 144 - Guarantee on contract that creditor shall not act on it until co-surety joins

Section 145 - Implied promise to indemnify surety

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