Section 146 of Indian Contract Act 1872 - Co-sureties Liable to Contribute Equally

Section 146 of the Indian Contract Act, 1872 lays down the rule of contribution between co-sureties. When two or more persons guarantee the same debt or duty, they ordinarily bear the liability equally between themselves unless they have agreed to a different arrangement.

In brief: If several co-sureties secure the same debt or duty, the unpaid amount is ordinarily shared equally among them. A contract between the co-sureties can alter that internal sharing arrangement.

What does Section 146 provide?

Section 146 - Co-sureties liable to contribute equally.

Where two or more persons are co-sureties for the same debt or duty, either jointly or severally, and whether under the same or different contracts, and whether with or without the knowledge of each other, the co-sureties, in the absence of any contract to the contrary, are liable, as between themselves, to pay each an equal share of the whole debt, or of that part of it which remains unpaid by the principal debtor.

Meaning and scope of Section 146

A co-surety is one of two or more persons who stand as sureties for the same debt or duty. Section 146 regulates the rights and liabilities between the co-sureties themselves. The section applies whether their guarantees are joint or several, whether they arise under the same document or different contracts, and whether the co-sureties knew of each other's guarantees.

The statutory rule is equal contribution, but it operates only in the absence of a contract to the contrary. Therefore, where the co-sureties have agreed to bear the guaranteed liability in specified proportions, their agreed proportions govern their contribution between themselves.

Essential conditions for equal contribution

There must be two or more co-sureties.
They must be sureties for the same debt or duty.
The guarantees may be joint or several and may be contained in the same or different contracts.
Knowledge of the other co-sureties is not necessary for the statutory rule to apply.
The equal-sharing rule applies unless there is a contract providing otherwise.
The contribution concerns the whole debt, or the portion that remains unpaid by the principal debtor.

Illustrations under Section 146

Illustration (a): A, B and C are sureties to D for Rs. 3,000 lent to E. E defaults. As between themselves, A, B and C must contribute Rs. 1,000 each.

Illustration (b): A, B and C are sureties to D for Rs. 1,000 lent to E, but they agree that A will bear one-quarter, B one-quarter and C one-half. On E's default, their contribution is Rs. 250, Rs. 250 and Rs. 500 respectively.

How Section 146 works with other guarantee provisions

Section 146 forms part of the provisions dealing with indemnity and guarantee under the Indian Contract Act, 1872. Section 126 defines a contract of guarantee and the expressions surety, principal debtor and creditor. Section 128 provides, subject to the contract, that the liability of the surety is co-extensive with that of the principal debtor. Section 138 provides that release of one co-surety by the creditor does not discharge the other co-sureties and does not free the released surety from responsibility to the other sureties. Section 147 deals specifically with co-sureties who are bound in different sums.

Section 146 and Section 147 - practical distinction

Section 146 states the general rule of equal contribution between co-sureties, subject to a contrary contract. Section 147 addresses the situation where co-sureties are bound in different maximum amounts. In such a case, contribution is equal only so far as the limits of their respective obligations permit.

Example of contribution between co-sureties

Suppose three co-sureties guarantee the same debt of Rs. 9,00,000 without agreeing on different shares. If the principal debtor pays Rs. 3,00,000 and Rs. 6,00,000 remains unpaid, the starting rule under Section 146 is that the three co-sureties contribute equally towards the unpaid Rs. 6,00,000, meaning Rs. 2,00,000 each, subject to the terms and limits of the relevant guarantees and other applicable provisions of law.

Frequently asked questions

Are co-sureties always liable in equal shares?

No. Equal contribution is the statutory default rule. Section 146 expressly recognizes a contract to the contrary, so co-sureties may agree upon different proportions.

Must all co-sureties sign the same guarantee?

No. Section 146 expressly covers co-sureties under the same or different contracts.

Must one surety know about the other sureties?

No. The section applies whether the co-sureties have knowledge of each other or not, provided they are co-sureties for the same debt or duty.

What amount is shared between co-sureties?

The section refers to the whole debt or the part that remains unpaid by the principal debtor. The precise contribution in a particular case can also depend on the contractual terms and, where the sureties are bound in different sums, Section 147.

Legal reference checked against the official India Code text of the Indian Contract Act, 1872. Page updated: 21 September 2026.