alleryOn paying the guaranteed debt, the surety acquires all the rights the creditor had against the principal debtor. This right is called:
ARight of indemnity
BRight of subrogation (Section 140)
CRight of set-off
DRight of contribution
Answer & Solution
Correct answer: B. Right of subrogation (Section 140)
Section 140 gives the surety, upon payment, the right of subrogation: he steps into the creditor's shoes and may enforce the creditor's rights against the principal debtor.
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