State the rights of a surety against the principal debtor, creditor and co-sureties.

Against principal debtor

Right of subrogation:-After paying the guaranteed debt, the surety steps into the shoes of the creditor and acquires all the rights which the latter had against the principal debtor (i.e., he gets subrogated to all the rights and remedies available to the creditor) (Sec. 140). 

If the creditor has the right to stop goods in transit or has a lien, the surety, on payment of all he is liable for, will be entitled to exercise these rights.

Right of indemnity :-

The surety is entitled to be indemnified by the principal debtor for all payments rightfully made by him (Sec. 145).

Right against the Creditor:-

1. Right to securities Sec(141)

2. Right to claim set off

3. Rights against the creditor

Right to securities Sec(141) :-

The surety can, after paying the guaranteed debt, compel the creditor to Assign to him all the securities taken by the creditor either before or at the time of the contract of guarantee, whether the surety was aware of them or not.

Claim to any set off :-

The surety on being called upon to pay can claim any set-off to which the principal debtor is entitled from the creditor.

Right against Co-sureties:-

Right to claim contribution

Surety can ask his co-sureties to contribute the amount when principal debtor comes across default. If they have given guarantee for equal amounts, they have to contribute equally. In case where guarantee is given for in equal amounts, the mode of contribution differs from England law to Indian law. 

As per England law contribution is to be made in the ratio of guarantee amounts. But as per Indian law the deficit amount is to be distributed to all sureties equally and every surety will contribute share of deficit or guarantee amount whichever is less.