A person, who by his words or actions represents himself as a partner, becomes liable to those who advance money or grant credit to a partnership firm on the basis of such representation. Such a person is called partner by estoppels.
Suppose a rich man, Mohan, is not a partner. But he tells Sohan that he is a partner in a firm called Shipra Enterprises.
On the impression that Mohan is a partner, Sohan gives a loan of Rs. 50,000 to Shipra Enterprises. Later on the firm is unable to repay the loan. Mohan becomes liable to Sohan. Here, Mohan is a partner by estoppels.