Step 1: Understanding the Concept:
A Partnership Deed is a written agreement that outlines the terms of the partnership.
In its absence (or when the deed is silent on specific matters), the Indian Partnership Act, 1932, provides a set of default rules to ensure the smooth functioning of the firm and the fair settlement of disputes.
Step 2: Detailed Explanation:
The Partnership Act serves as a "default legal framework."
When partners do not create their own specific set of rules (the Deed), the following rules from the Act automatically apply:
1. Profit Sharing: Profits and losses are to be shared equally among all partners, regardless of their capital contributions.
2. Interest on Capital: No partner is entitled to any interest on the capital they have contributed to the firm.
3. Interest on Drawings: No interest is to be charged on the drawings made by the partners.
4. Remuneration: No partner is entitled to any salary, commission, or remuneration for taking part in the conduct of the business.
5. Interest on Partner's Loan: If a partner provides a loan to the firm (beyond their capital), they are entitled to interest at the rate of 6% per annum.
Analyzing the options:
Option (A) is the primary trigger. The Act is intended to fill the vacuum created by the absence of a Deed.
Option (B) is incorrect because if a Deed exists, the disagreement should be settled by interpreting the Deed or through arbitration as per the Deed's clauses.
Option (C) is irrelevant; unequal capital contribution is common and does not trigger the Act as long as a Deed specifies the profit-sharing ratio.
Option (D) is a specific instance covered under the broader scope of Option (A). If the deed is silent on salary, that specific provision of the Act applies, but the general applicability of the Act stems from the lack of a comprehensive deed.
Step 3: Final Answer:
The Act is the fallback mechanism for firms without a formal deed.
Correct Answer is (A).