Section 147 The Indian Contract Act, 1872
π Section 147 β The Indian Contract Act, 1872
Section 147 falls under the chapter dealing with Contracts of Guarantee.
π Section 147 β Co-sureties Liable to Contribute Equally
"In the absence of any contract to the contrary, co-sureties for the same debt or duty, jointly or severally, and whether under the same or different contracts, 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."
β Explanation:
When multiple sureties (co-sureties) give a guarantee for the same debt or obligation, they are equally liable to share the burdenβunless there is an agreement that says otherwise.
This applies even if:
The co-sureties signed separate guarantee agreements, or
Some are liable jointly, while others are severally.
π Key Points:
Applies when two or more sureties guarantee the same liability.
They are liable to contribute equally to what the principal debtor fails to pay.
This rule can be modified by a contract between the co-sureties.
π§ Illustration:
A, B, and C are co-sureties for a debt of βΉ90,000. The principal debtor pays only βΉ30,000. The remaining βΉ60,000 must be paid equally by A, B, and C β i.e., βΉ20,000 each.
π§ββοΈ Case Law Reference:
Union Bank of India v. M. Venkatesh Gowda (2006)
It was held that co-sureties must contribute equally unless a different arrangement exists between them.
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