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What are the remedies for recovering shared expenses in partnerships?

07-Mar-2025
Recovery

Answer By law4u team

In an Indian partnership, if one partner has paid more than their share of expenses, they have the right to recover the excess amount from the other partners. The remedies available for recovering shared expenses in a partnership include: Mutual Settlement – The partners can resolve the issue through discussion and settlement as per the terms of the partnership agreement. Right to Indemnification (Section 13 of the Indian Partnership Act, 1932) – A partner is entitled to be indemnified by the firm for payments made in the ordinary course of business or for protecting the firm's interests. Accounting Suit (Section 9 & 37 of the Indian Partnership Act, 1932) – A partner can file a suit for an account settlement, especially if the firm is dissolved or if their rights are violated. Arbitration – If the partnership agreement includes an arbitration clause, the dispute must be resolved through arbitration. Civil Suit for Recovery – If other remedies fail, the aggrieved partner can file a civil suit for recovery of the amount, citing unjust enrichment by the other partners. If the partnership is registered, legal action is more straightforward under the Indian Partnership Act, 1932. If the firm is unregistered, legal action may be restricted under Section 69 of the Act, except in cases of dissolution or indemnification claims.

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