Case:

Shanthi, Priya and Kamala carry on partnership business as garment manufacturers.

Shanthi orders two cases of Kulu apples to be delivered to her married daughter. The order is sent on the firms letter head and in the firms name. Kamala and Priya dispute that this amount towards the apples should not be accounted in the firm. Examine

Facts: Shanthi, Priya and Kamala carry on partnership business. Shanthi orders two cases of Kulu
apples to be delivered to her married daughter. Order is sent on the firms letter head and in the firms name. Kamala and Priya dispute that this amount towards the apples should not be accounted in the firm.

Analysis: Shanthi for her personal use had ordered the apples on the firms letter head. Interpretation:

Shanthi on her sole personal interest has ordered the apples on the firms

letter head, so as she has purchased those apples for her personal use, she is liable to reimburse the money in the firms account.

Conclusion: Kamala and Priya are right in their argument that the apples should not be
accounted in the firms letterhead.

Justification:

The agreement amongst the three partners was to do business together and

not to use companys money for personal use. So if Shanti is using the money then she has to indemnify it or reimburse to the capital of the firm.