The main legal point established in the judgment is the distinction between negligence as a question of law and as a question of fact, and the duty of care expected from the drawee bank and the collecting bank in cases involving forged drafts.

1. The first of these appeals is by the first defendant, the drawee bank of a draft for Rs. 4000/- taken by the plaintiff at its Alleppey branch payable to Pw. 2, the proprietor of Hurry Das Auddy, at the New Market branch of the bank at Calcutta. The draft was sent by the plaintiff to a friend of his, pw.1; but it was intercepted in transit by the third defendant, a customer of the second defendant bank. And the Shambazar branch of the second defendant collected the draft from the first defendant. The amount was also withdrawn by the third defendant. The plaintiff filed the suit for recovery of the amount against defendants 1 to 3; and all the courts including a judge of this Court in second appeal held that defendants 1 and 3 were liable. The appeal is against that decision The third defendant did not contest.

2. The second of the appeals is by the second defendant, the collecting bank who collected the draft from the first defendant on behalf of its customer, the third defendant. The trial court dismissed the suit against the second defendant; but the lower appellate court and the second appellate judge held that the second defendant was also liable. And A. S. A No. 12 of 1969 is against that decision.

3. The decision of the second appellate judge is reported as Central Bank of India Ltd., Bombay-I v. V. Gopinathan Nair (AIR. 1970 Ker 74).

4.We shall first consider A S. A. No. 11 of 1969. Since all the three courts including the learned second appellate judge have held that the first defendant is also liable, we are very careful and circumspect in dealing with this case. But, after hearing arguments at some length, we feel that the concurrent decision including that of the second appellate judge requires variation.

5. The first defendant claims protection under S.85A of the Negotiable Instruments Act, which reads:

"Where any draft, that is, an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due course."

The learned second appellate judge has observed that the lower courts have found that the first defendant was negligent, and has also observed that negligence is a question of fact: the reasoning of the learned judge appears to be that, since that finding was on a question of fact, in second appeal, the learned judge should not interfere with that conclusion. We wish to point out a distinction, which, we are sure, is real, between two aspects. What is negligence is not a question of fact but is a question of law; and whether such negligence is established in a particular case is a question of fact depending upon the facts and circumstances of that case. We feel that this distinction has not properly been kept in view. The learned second appellate judge has considered two English decisions: and in one of them itself this distinction is indicated, because it is pointed out that negligence is a question of fact to be decided by the jury, but the jury should be properly charged, which means that it is the duty of the judge to tell the jury as to what is meant by negligence (vide the Metropolitan Railway Company v. Jackson: (47 (1878) Q. (Q.B.) 303). If that is done, then whether such negligence is established in the circumstances of a case is a question to be decided by the jury, a question of fact.

6. The facts of the case, as we have already indicated, are simple and are not disputed. The third defendant, a customer of the second defendant, forged the signature of the payee and then endorsed the draft (Ex. P1) in favour of his own bank for collection and the second defendant collected the amount from the first defendant. And the third defendant withdrew the amount too. As already pointed out. S.85A lays down that the drawee bank of the draft is discharged by payment in due course. S.10 of the Negotiable Instruments Act defines "payment in due cours