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In the law of guarantee, what does describing a surety as a “favoured debtor” mean?

In State of Maharashtra v. Dr. M. N. Kaul, the Supreme Court used the description when explaining that a surety’s liability depends on the undertaking as properly construed.…

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In the law of guarantee, what does describing a surety as a “favoured debtor” mean?

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Answer and explanation

Correct answer B

In State of Maharashtra v. Dr. M. N. Kaul, the Supreme Court used the description when explaining that a surety’s liability depends on the undertaking as properly construed. Section 128 makes the liability co-extensive by default, subject to the guarantee’s terms.

Option feedback

Option A

The description does not impose an exhaustion requirement. Direct enforcement remains available according to the guarantee’s terms.

Option B

The description concerns the scope of the undertaking. A surety is bound only to what the guarantee, properly construed, covers.

Option C

The phrase establishes no half-share cap. The contractual undertaking determines the extent of liability.

Option D

The description confers no power to change an existing undertaking unilaterally.

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