Section 27 Indian Partnership Act

Section 27 of the Indian Partnership Act 1932 is about Liability of firm for misapplication by partners. It is under CHAPTER IV (RELATION OF PARTNERS TO THIRD PARTIES) of the Act.

Liability of firm for misapplication by partners.

Where–

(a) a partner acting within his apparent authority receives money or property from a third party and misapplies it, or

(b) a firm in the course of its business receives money or property from a third party, and the money or property is misapplied by any of the partners while it is in the custody of the firm,

the firm is liable to make good the loss.