Question

Under Section 37 of the Indian Partnership Act, 1932, when the amount due to an outgoing partner remains wholly or partly unpaid and there is no agreement regarding payment of interest or share of profit, the outgoing partner or his legal representative is entitled to:

• A. Interest @ 12% p.a. on the outstanding amount only
• B. Either interest @ 6% p.a. on the outstanding amount or share in profits attributable to the unpaid amount
• C. Share in profits only, irrespective of any agreement
• D. Neither interest nor share in profits until final settlement is made

Hint:

Remember the keyword for Section 37: \[ \boxed{6% \text{ interest OR profit share}} \] Whenever an outgoing partner's dues remain unpaid and there is no agreement, the law provides these two alternative remedies.

Answer 1

The Correct Option is B