What's the ruling?
Depends on where the balls where before the fateful shot was struck: Were both balls already on the putting green, or were neither or just one of the balls on the green?
Scenario 1: Neither Ball, or Just one Ball, on the Green
This could mean the shot in question was a tee shot, or an approach played into a green, or any other scenario other than when both balls were on the green prior to making the stroke.
For example, your partner hits a tee shot, then you hit yours, and your ball hits your partner's ball in the fairway. Or your partner is on the green, you hit an approach shot, and your ball hits your partner's on the green.
This is covered in Rule 18-5, Ball at Rest Moved by Another Ball. There is no penalty to either player as long as this procedure is followed: The person whose shot struck the ball at rest plays his ball as it lies; the person whose ball was moved returns the ball to its original position.
Failure to replace the ball that was moved to its original spot; or moving the ball that did the striking (rather than playing it as it lies) results in loss of hole in match play or a 2-stroke penalty in stroke play.
Scenario 2: Both Balls on Putting Green
"Both balls on putting green" means on the putting green prior to the stroke in question.
The ruling here is covered in Rule 19-5a.
From the green, Player A hits his putt, but the ball strikes the ball of Player B, who was also on the green. In match play there is no penalty. In stroke play, it's a 2-stroke penalty to the player whose ball was in motion when the balls collided.
Repeat: It's not a penalty against the player whose ball was at rest; the penalty is against the player who struck the putt.
The player whose ball was at rest replaces it to its original position; the player whose ball was in motion plays it as it lies.
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