A partnership firm consists of three partners 'A', 'B' and 'C', and they owe 'R' a sum of Rs. 15000/-.…
Under Section 32(2) of the Indian Partnership Act, 1932 read with the principle of novation, where the continuing partners agree with the creditor to assume the retiring…
Choose your answer
A partnership firm consists of three partners 'A', 'B' and 'C', and they owe 'R' a sum of Rs. 15000/-. 'A' wants to retire and it is agreed amongst all the three partners and 'R' that after retirement of 'A', 'B' and 'C' as continuing partners shall be liable for the dues of 'R'. After the retirement of 'A', 'R' sues 'A' for recovery of Rs. 15000/-. Which of the following is correct?
Answer and explanation
Correct answer A
Under Section 32(2) of the Indian Partnership Act, 1932 read with the principle of novation, where the continuing partners agree with the creditor to assume the retiring partner's liability, the retired partner is discharged, so "'R' has no right to sue 'A' as after the retirement of 'A' a new agreement came into being between 'R' and the partnership firm and 'A' stood discharged of his liability towards 'R'".
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