Suman, having 10% share in the property of 200 lakh of a firm retires from the firm on 31 March, 2023. The firm continues with the business thereafter without final settlement of accounts between the existing and retired partners and earned profits of 10 lakh during the financial year ending 31st March, 2024. Suman, in her own interest and in the absence of any provision in the partnership firm on this point, claimed 3 lakh from the firm toward the use of her share in the property and profit of the firm which was rejected by the partners. There is no contract between the partners contrary to the provisions of the Act in this regard. Examine the validity of the amount claimed by Suman under the provisions of The Indian Partnership Act, 1932.

According to section 37 of the Indian Partnership Act, 1932, • Where any member of a firm has died or otherwise ceased to be partner, and the surviving or continuing partners • carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, • the outgoing partner or his estate is entitled at the option of himself or his representatives • to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or • to interest at the rate of six per cent per annum on the amount of his share in the property of the firm. In the instant case, Suman is entitled to claim either interest on her share in the property i.e. ` 1,20,000 (6% of ` 20 Lakh) or a share of the profits i.e. ` 1 Lakh (10% of ` 10 Lakh) from the firm for the use of her share in the property. Therefore, claim of Suman of ` 3 Lakh is not valid.