M. Satyanarayana Murthy, J.

1. The 1st defendant in OS No. 89 of 1987 on the file of Subordinate Judge, Jagtial, filed this appeal against the impugned judgment and decree dated 4.3.1996, wherein the defendants 1 and 2 were made liable to pay Rs. 50,000/- with interest at 12% per annum from the date of suit till the date of realization. The appellant was the 1st defendant and the respondents 1 and 2 were the plaintiff and 2nd defendant before the trial Court and they will be ranked as in suit, for convenience sake and for reference.

2. The plaintiff filed the suit for recovery of Rs. 50,000/- against both the defendants together with interest contending that the plaintiff is the customer of defendant No. 1 and the bank is acting on behalf of plaintiff for both paying and receiving amount. The Registrar of Co-operative Societies appointed Inspector to inspect the books, during the inspection, mis-appropriation of amount of the plaintiff-society was noticed. On 4.11.1986 the Chief Project Manager, Rural Electrification Corporation Limited addressed a letter to the plaintiff for monitoring of annual accounts of the plaintiff-society for the year 1984-85, Sri B. Rajaiah, S.A. Cess Limited, Sircilla was asked to attend the FDRs reconciliation work with various banks on top priority basis and found the difference in FDRs account from general ledger and investment register. On verification of FDRs reconciliation work with defendant No. 1 bank and after 2.12.1986 it was found that an amount of Rs. 50,000/- was misappropriated by defendant No. 2 out of FDR proceeds credited to the plaintiffs current account with defendant No. 1 bank on 23.10.1982.

3. On 30.9.1982 the Accounts Officer, K.V.L. Narsimha Rao sent a letter to defendant No. 1 along with 5 other FDRs aggregating Rs. 4,25,231.10 ps. with instructions to the bank to credit the amount to the plaintiff's current account and again after debiting to the current account, with Rs. 4,23,876.58 ps. to issue two FDRs for Rs. 1,68,374.79 ps. for eighty four months and for Rs. 2,55,501.79 ps. for (120) months. In the said letter under the instructions, D2 had left some place and then got the signature of the Accounts Officer. D2 has managed in fair copy of said letter sent to D1 on 23.10.1982 and added another Part-C instructions written in manuscript requesting to issue D.D., for Rs. 50,000/- in favour of Sri T. Seetharamulu (D2) payable at Indian Overseas Bank, Sulthan Bazar, Hyderabad under intimation to the plaintiff. Thus, the 2nd defendant tampered the figures in the letter correcting Rs. 2,55,501.79 ps. as Rs. 2,05,501.79 ps. by altering the letter materially and swallowed an amount of Rs. 50,000/-. Thus, D2 misappropriated Rs. 50,000/- and on the instructions of D2 the 1st defendant negligently without verifying, issued D.D., for Rs. 50,000/- in favour of D2. Thus, on account of negligence of D1 the plaintiff suffered huge loss of Rs. 50,000/-. Hence, both D1 and D2 are liable to pay the said amount together with interest and claimed relief against both the defendants making them liable for payment of the amount jointly.

4. The defendant No. 1 filed written statement denying material allegations while contending that the plaintiff-society used to correspond with the 1st defendant either on cyclostyled or typed proformas and filling up the blanks in handwriting of the 2nd defendant with the signatures of the officer concerned. Similarly a letter CESS No. 984/A-82 dated 30.9.1982 was issued by the plaintiff and the 1st defendant acted upon the letter, kept the amount in deposits and issued demand draft in the name of the 2nd defendant drawn on Canara Bank for Rs. 50,000/-. Therefore, the 1st respondent-bank is not responsible for misappropriation of Rs. 50,000/- by the 2nd defendant.

5. It is specifically contended that the suit claim of the plaintiff is barred by limitatio