Definition
The substitution of one creditor for another, allowing the substituted creditor to take over the original creditor's rights against the debtor. In banking, when an ARC purchases NPAs from a bank, it is subrogated to the bank's rights against the borrower. Similarly, if a guarantor pays the bank's dues, the guarantor is subrogated to the bank's rights against the principal borrower.
Need Expert Advice on Subrogation?
For specific advice on how Subrogation applies to your debt recovery matter, consult Advocate Subodh Bajpai — LLM, MBA (XLRI Jamshedpur). 25+ years of exclusive banking and debt recovery practice across DRT, SARFAESI, IBC, and NI Act.
Defined by Advocate Subodh Bajpai, Senior Partner, Unified Chambers and Associates