VENKATARAMA AIYAR J.

This appeal arises out of a suit instituted by the respondent, which is firm of cloth merchants carrying on business among other places, at Madras, for the recovery of a sum of Rs. 5, 225-12-9 from the Bharat Bank Ltd., who are the appellants. On November 24, 1943, the respondent drew a cheque for Rs. 5, 225-12-9 on the Chartered Bank of India, Australia and China at Madras payable to their Benaras branch or bearer. The cheque was crossed and sent by ordinary post to the payee at Benaras. Exhibit P 2 is a photographic copy of the said cheque. On December 6, 1943, a person who gave out his name as Matha Prasad Gupta opened an account with the Mount Road branch of the appellants with a cash deposit of Rs. 250 and then put into his account the cheque drawn by the plaintiff on November 24, 1943, and the same was cashed by the bank in the usual course of business through the clearing house on December 7, 1943. Matha Prasad Gupta operated on this account by issuing a cheque for Rs. 200, [Exhibit P. 4 (a)] and another cheque for Rs. 2, 225 [Exhibit P. 4 (b)] both dated December 6, 1943, and drawn in favour of one Seetharam. On December 7, 1943, he drew a cheque for Rs. 125 in favour of a watchmaker [Exhibit P. 4 (d)] and on December 9, 1943, himself drew a cheque for Rs. 2, 800 [Exhibit P. 4 (c)], and thereafter disappeared. The balance remaining to the credit of his account at that time was Rs. 124-9-0

The plaintiff discovered the loss of the cheque in March, 1944, and lodged a complaint with the police. Investigation which followed thereon revealed that the person who had chased the cheques. Exhibits P. 4 and P. 4(b), and signed his name as Seetharam was in truth a person called R. P. Misra of Benaras; that the person who gave out his name as Matha Prasad Gupta was in fact a person called Jawahar Lal; that they along with others had conspired to commit theft of cheques and to cash them by forging signatures; that in pursuance of this conspiracy one Jai Narayan had stolen the cheque of which Exhibit P. 2 is a copy; that Jawahar Lal turned approver; Misra was prosecuted along with nine others for various offences in Sessions Case No. 15 of 1945 on the file of the Court of the Additional Sessions Judge, Benaras, and convicted and sentenced to imprisonmentIn the meantime the plaintiff instituted the suit out of which this appeal has arisen for the recovery of the amount of the cheque from the appellants on the ground that Jawahar Lal alias Matha Prasad Gupta go no title to it and that by receiving the amount due thereon the bank had become liable to the plaintiff in conversion. The appellants pleaded that in realising the cheque they had acted in good faith and without negligence and that they were accordingly protected by Section 131 of the Negotiable Instruments Act. The suit was tried by MACK J. He held that Matha Prasad Gupta had been permitted by the bank authorities to open an account without proper introduction, that Exhibit P. 2 had been cashed without due examination of the endorsements thereon and that such examination would have revealed the true character of the transaction, that the bank had been negligent at all stages of the matter and was, therefore, not entitled to rely on Section 131 of the Act, in answer to the claim. In the result the suit was decreed. The defendants prefer this appeal

The only point for decision in this appeal is whether the appellants are entitled to the protection afforded by Section 131 of the Negotiable Instruments Act on the ground that they received payment of the cheque "in good faith and without negligence" as provided in the section, the burden of establishing the same being unquestionably on them. Though the section requires good faith and absence of negligence in the receipt of the payment of the cheque amount the sense of the matter requires that these elements should be present at all stages of the transaction culminating in the cashing of the cheque. The