S
Sahaj Vidhi
Delhi Judicial Services 2006

A partnership firm consist of 3 partners A, B, & C & owes R sum of Rs 15000/- A want to return & it is agreed amongst all the three partners & R that after retirement of A, B, & 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/-

Verified Answer
A. R has a right to sue A to extent of Rs 5000 being the portion attributable to A
B. R has no right to sue A as after the retirement of A a new agreement came into being between R & firm & A stood discharged of his liability towards R
C. R can sue the firm consisting of B & C along with A as liability of all the partners is joint & several
D. R has an option to sue the firm consisting of B & C or retired partner A

Explanation:

This situation involves the concept of novation and the discharge of a retiring partner's liability. According to Section 32(3) of the Indian Partnership Act, 1932, a retiring partner may be discharged from any liability to a third party by an agreement made by him with such third party and the partners of the reconstituted firm. In this case, R (the third party) explicitly agreed with A, B, and C that after A's retirement, B and C (as continuing partners) would be liable for the dues. This constitutes a novation, creating a new agreement and discharging A from his liability to R. Therefore, R has no right to sue A.