Retirement of a partner
Commencement. 1932-10-01 (except section 69) 1933-10-01
Section 32 of the Indian Partnership Act, 1932 deals with retirement of a partner. A partner may retire-- (a) with the consent of all the other partners, (b) in accordance with an express agreement by the partners, or (c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire. The Act was enacted on 08 Apr 1932.
(1) A partner may retire--
(a) with the consent of all the other partners,
(b) in accordance with an express agreement by the partners, or
(c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.
(2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement.
(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement:
Provided that a retired partner is not liable to any third party who deals with the firm without knowing that he was a partner.
(4) Notices under sub-section (3) may be given by the retired partner or by any partner of the reconstituted firm.
Section 32, The Indian Partnership Act, 1932 (Act 9 of 1932).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Pamuru Vishnu Vinodh Reddy vs Chillakuru Chandrasekhara Reddy
Court's Decision & Legal Precedent
Where a partner retires from a partnership firm with the consent of all other partners and agrees to sell his share, the relevant date for ascertaining the value of the retiring partner's share is the date on which he ceased to be a partner (the retirement date), not the date on which a court-appointed Commissioner subsequently values the share. The unpaid value of the share constitutes a debt due from the continuing partners to the retiring partner, and the retiring partner is entitled to interest at six per cent per annum on the unpaid amount from the date of retirement as per Section 37 of the Indian Partnership Act. Non-payment of the agreed consideration does not negate the legal effect of retirement but merely creates a debt obligation.
On this section: Defines retirement of a partner with consent of all other partners and establishes that retirement does not dissolve the partnership but only severs the relationship between retiring and continuing partners. The Court applied this to establish that the plaintiff had validly retired on 5.4.1971 with the consent of all partners.
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Inderjit Singh @ Kaka v. Punjab Financial Corporation
Court's Decision & Legal Precedent
Final Order order-1.pdf 2018-10-04 DATE VERIFIED. Anil Kshetarpal J. RSA 4141/2017 (oral, reasoned). Isolate: Partnership Act s.32(3) — a retired partner remains liable to third parties for acts that would have been acts of the firm if done before retirement, until public notice of retirement is given; liability incurred while he was a partner (PFC loan to Cross India Plastic Industries) is recoverable despite a later retirement. Leading HC. Distinctive (Inderjit @ Kaka, PFC). Map 32 only — 4/6/69 already filled.
On this section: Partnership Act s.32(3) keeps a retired partner liable to third parties until public notice of retirement; a loan incurred while he was a partner remains recoverable (Inderjit Singh @ Kaka).
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 32
What have the courts held on Section 32 of the Indian Partnership Act?
Pamuru Vishnu Vinodh Reddy vs Chillakuru Chandrasekhara Reddy (17 Feb 2003) is the leading judgment on this section among those set out below: Defines retirement of a partner with consent of all other partners and establishes that retirement does not dissolve the partnership but only severs the relationship between retiring and continuing partners. The Court applied this to establish that the plaintiff had validly retired on 5.4.1971 with the consent of all partners. Another 1 judgment on this section is set out below, 1 of them from the Supreme Court. They run from 2003 to 2018.
How do I find court cases under Section 32 of the Indian Partnership Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Partnership Act 32, section 32 Partnership Act, section 32 of the Indian Partnership Act. People searching for it also type indian partnership act 1932 section 32. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Pamuru Vishnu Vinodh Reddy vs Chillakuru Chandrasekhara Reddy (17 Feb 2003).
What should I read with Section 32 of the Indian Partnership Act, and has it changed?
1 other provision in this corpus refers back to it.
When was Section 32 of the Indian Partnership Act enacted?
Section 32 of the Indian Partnership Act, cited as Partnership Act 32, was enacted on 08 Apr 1932 as Act 9 of 1932. It is in force as at the date shown on this page.
Other sections of this Act
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.