(1) After the surety has, on behalf of
the principal debtor, repaid the loan to be repaid or discharged the
obligation to be discharged to the creditor under the contract, the
surety shall substitute the creditor in relation to such loan or
obligation, and, as the creditor, be entitled to recover the loan from,
or institute legal action against, the principal debtor.
(2) Notwithstanding anything contained elsewhere in this
hapter, the principal debtor shall pay to the surety the sum of loan
repaid by the surety or all amounts in consideration for the
obligation performed by the surety on behalf of the principal debtor,
as well as interest or any other fee or amount chargeable thereon.
(3) If it becomes necessary to institute legal action because
of the default of the principal debtor to pay the amount payable by
317
him or her under sub-section (2) or if any other expenses need to be
incurred in this regard, the surety shall be entitled to recover also
such expenses from the principal debtor.