Protection not available.

S. Mohan, J.

1. The first defendant is the appellant before us in this appeal, which arises out of O.S.No. 9477 of 1978 on the file of the VI Additional Judge, City Civil, Madras. The short facts are as follows: The said suit laid for the recovery of a sum of Rs. 40,565.91 P. on the following allegations as stated in the plaint: The second plaintiff, Messrs. Seshasayee Paper and Boards Ltd., is a customer of the first plaintiff, the United Commercial Bank, Madras Main Office. The second plaintiff issued a cheque bearing No. 029775 on 20.11.1975 for a sum of Rs. 25,636 in favour of Messrs. I.C.I. (India) Private Limited, Bombay. It appears the cheque was intercepted by the second defendant, I.C. Pal Industries. The same was presented to the first defendant Bank (the appellant herein) for collection after altering the name from I.C.I. (India) Limited to I.C. Pal Industries. There was an alteration in relation to the date as well from 20.11.1975 to 28.11.1975. The first defendant made an endorsement 'Payees' Account credited' and the cheque was sent for collection through the clearing house. The first plaintiff acted bona fide and in the usual course of business having regard to the apparent tenor of the instrument. Further, relying on the endorsement of the first defendant, the cheque was honoured, and the statement of account was sent in due course. The second plaintiff received a letter from I.C.I. (India) Private Limited on 10.2.1976, intimating that they did not receive any cheque. Thereupon, the first plaintiff drew the attention of the first defendant to the complaint of the second plaintiff by its letter dated 20.2.1975, calling upon the first defendant to reimburse the said sum of Rs. 25,636. The first defendant denied the liability, but would, however, add that it was the customer who was criminally liable. Correspondence ensued between the parties. It appeared that after the collection the first defendant allowed the entire amount to be withdrawn by the second defendant and there were no further transactions. The first defendant did not make proper enquiries before opening of the account by the second defendant, and the conduct of the first defendant was totally negligent. There were enquiries into the antecedents of the second defendant. They had not taken due care and caution as required on their part. It is on account of the first defendant's endorsement the first plaintiff parted with the money. In so far as the first defendant acted negligently as the collecting banker and by their conduct, and the second defendant having fraudulently altered the cheque, they are bound to reimburse the said amount with interest at 16 per cent per annum. Though a notice of demand was issued, the demand had not been met and hence the suit.

2. The first defendant, in their written statement, urged that the service on the second defendant cannot be complete and the address of the second defendant furnished in the plaint as care of the first defendant Bank is incorrect. The first defendant further contended that the cheque in question was lodged with them by the second defendant on 28.11.1975 for collection. Subsequently, on 1.12.1975, out of the amount credited. The second defendant drew a sum of Rs. 465 and another sum of Rs. 24,000 by self cheques. The first defendant had no knowledge about the alterations in the date as well as in the name of the payee. Only after receipt of the letter from the first plaintiff, the first defendant came to know that the cheque was not issued in favour of the second defendant. The first defendant had only merely acted as collecting banker for their customer. There was nothing on the face of the cheque to rouse the suspicion of the first defendant. There was no negligence on their part and they had acted in good faith. They are therefore protected under Section 131 of the Negotiable Instruments Act. On the contrary, it was the first plaintiff that was negligent. If only the first plaintiff had scru