Sections 146 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
When several people stand surety for the same debt, who bears how much? Section 146 says that, unless they agree otherwise, co-sureties share the whole debt equally as between themselves. Section 147 deals with co-sureties bound in different sums: they pay equally as far as the limits of their obligations permit. If you are a co-surety and want to understand your share, our legal consultation service can help.
Co-sureties for the same debt or duty, whether jointly or severally, under the same or different contracts, and with or without knowledge of each other, are liable, in the absence of any contract to the contrary, to pay each an equal share of the whole debt, or of the part still unpaid by the principal debtor (s.146). Co-sureties bound in different sums are liable to pay equally as far as the limits of their respective obligations permit (s.147).
Section 146: equal shares
The text: "Where two or more persons are co-sureties for the same debt or duty, either jointly or severally, and whether under the same or different contracts, and whether with or without the knowledge of each other, the co-sureties, in the absence of any contract to the contrary, 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."
The Act's footnote to this section refers to section 43, which deals with contribution among joint promisors.
| Limb | Plain meaning |
|---|---|
| "co-sureties for the same debt or duty" | Two or more sureties for one and the same obligation |
| "either jointly or severally" | They may have bound themselves together or separately |
| "under the same or different contracts" | One guarantee or several |
| "with or without the knowledge of each other" | A co-surety may not know the others exist |
| "in the absence of any contract to the contrary" | They may agree different shares |
| "as between themselves" | This rule governs the sharing among sureties, not what the creditor can demand |
| "an equal share of the whole debt, or of that part of it which remains unpaid" | Equal shares of what is owed |
The words "as between themselves" matter: section 146 deals with how the sureties divide the burden among themselves.
The Act's illustrations to section 146
- Illustration (a). A, B and C are sureties to D for the sum of 3,000 rupees lent to E. E makes default. A, B and C are liable, as between themselves, to pay 1,000 rupees each.
- Illustration (b). A, B and C are sureties to D for 1,000 rupees lent to E, and there is a contract between A, B and C that A is to be responsible to the extent of one-quarter, B one-quarter and C one-half. E makes default. As between the sureties, A is liable to pay 250 rupees, B 250 rupees and C 500 rupees.
Illustration (b) shows the "contract to the contrary" at work.
Section 147: different sums
The text: "Co-sureties who are bound in different sums are liable to pay equally as far as the limits of their respective obligations permit."
So each is capped by the sum he is bound for, and within the caps the shares are equal.
The Act's illustrations to section 147
In all three illustrations A, B and C, as sureties for D, enter into three separate bonds, each in a different penalty: A for 10,000 rupees, B for 20,000 rupees and C for 40,000 rupees, conditioned for D's duly accounting to E.
- (a) D defaults to the extent of 30,000 rupees. A, B and C are each liable to pay 10,000 rupees.
- (b) D defaults to the extent of 40,000 rupees. A is liable to pay 10,000 rupees, and B and C 15,000 rupees each.
- (c) D defaults to the extent of 70,000 rupees. A, B and C have to pay each the full penalty of his bond.
| Default | A (cap 10,000) | B (cap 20,000) | C (cap 40,000) |
|---|---|---|---|
| 30,000 | 10,000 | 10,000 | 10,000 |
| 40,000 | 10,000 | 15,000 | 15,000 |
| 70,000 | 10,000 | 20,000 | 40,000 |
In (b), an equal split would be 13,333 each, but A can pay only up to 10,000, so the remaining 30,000 is shared equally between B and C.
A modern example of our own
Aarav, Bhavna and Chirag each give a personal guarantee to a lender for a business loan to Dhruv Enterprises. Aarav and Bhavna each guarantee up to 6 lakh rupees; Chirag guarantees up to 2 lakh rupees. The business defaults on 9 lakh rupees. Following section 147 and the Act's illustration (b), each pays equally as far as his limit permits: Chirag reaches his limit at 2 lakh, and Aarav and Bhavna share the remaining 7 lakh rupees equally, 3.5 lakh each. If, instead, they had a written contract among themselves fixing their shares, section 146 would give way to it, as in illustration (b) to section 146.
What can the parties change?
Section 146 is expressly subject to "any contract to the contrary", as between the sureties. Section 147 has no such words, but it is stated by reference to "the limits of their respective obligations", which the guarantee documents themselves set. The text does not go further, so a clause meant to change the sharing should be checked with advice.
Sections 146 and 147 and section 138
Section 138 says that release by the creditor of one co-surety does not discharge the others and does not relieve the released surety of responsibility to the others. See sections 136 to 138. The sharing rules here are the other side of that responsibility. Section 144 deals with a guarantee conditional on a co-surety joining; see sections 144 and 145.
What the sections do not say
- They do not say how a surety who has paid more than his share gets reimbursed by the others; the text speaks of each being "liable ... to pay each an equal share".
- They do not deal with what happens if one co-surety cannot pay his share.
- They do not discuss the creditor's right to claim the whole sum from any one surety.
Practical points
- Co-sureties should record in writing how they will share any payment.
- Know the cap in each guarantee: section 147 works from the limits of each surety's obligation.
- Keep records of any payment made and the date, in case a co-surety must be asked to contribute.
Need help understanding your share as a co-surety?
If you have signed alongside others, or have paid more than you think is your share, the guarantee documents and any agreement among the sureties decide the position. Our legal consultation team can walk through sections 146 and 147 with your numbers. Bring every guarantee and any understanding among the sureties.
Key takeaways
- Co-sureties share the debt equally as between themselves, unless they contract otherwise (s.146).
- The rule applies jointly or severally, under the same or different contracts, with or without knowledge of each other.
- Co-sureties bound in different sums pay equally as far as the limits of their obligations permit (s.147).
- The Act's illustrations show the working with 3,000, 1,000 and 10,000, 20,000, 40,000 rupee figures.
Read next
- Sections 144 and 145: co-surety joining and implied indemnity to surety
- Section 148: bailment, bailor and bailee defined
- Indemnity and Guarantee: sections 124–147 overview
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.