A, B and C are partners in an unregistered partnership firm named M/s ABC & Associates. Is the suit maintainable in the following cases as per…

(iii) M filed a suit against the firm for recovery of 10,000/- dues. M also owed - 4,000/-. The firm claimed a set-off: The said suit by M is Maintainable Justification: According to Section 69 (2) of the Indian Partnership Act,1932, in case of an unregistered firm, an action can be brought against the firm by a third party. If an action is brought against the firm by a third party, then neither the firm nor the partner can claim any set-off, if the suit be valued for more than 100or pursue other proceedings to enforce the rights arising from any contract. Here, M filed a suit against the firm for the recovery of 10,000 dues from the firm. M also owed - 4,000/- to the firm. The firm cannot set-off the claim of 4,000/- as it is more than - 100/-. Nevertheless, M is entitled for recovery of 10,000 from firm.