New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    A surety is entitled to be indemnified by the principal

    debtor__________
    A In respect of sums wrongfully paid Correct Answer Incorrect Answer
    B In respect of sums rightfully paid Correct Answer Incorrect Answer
    C In respect of sums paid rightfully of wrongfully Correct Answer Incorrect Answer
    D All the above Correct Answer Incorrect Answer

    Solution

    Section 145 In a contract of guarantee, when the principal debtor makes a default, the surety has to make payment to the creditor. This payment is made by the payment to the creditor. This payment is made by him on behalf of the principal debtor. After making such payment, he can recover the same from the principal debtor. Such a claim can be made by the surety only in respect of the sums he has rightfully paid under the guarantee, but not the sums which he has paid wrongfully.

    Practice Next

    Relevant for Exams: