Judgment ( 1. ) THESE two appeals have arisen out of an award dated 26th august, 2004 passed by learned II Additional Motor Accidents claims Tribunal, Shahdol in Claim Case No. 11/2001. ( 2. ) M. A. NO. 70/2005 has been filed by the Insurer praying to dismiss the claim application by setting aside the impugned award and M. A. No. 456/2005 has been filed by the claimant for enhancement of the award. Since both these appeals have arisen out of a common award, they are being disposed of by this common order. ( 3. ) IN brief the case of claimant Indrapal as borne out from the application under section 166 of the Motor Vehicles Act, 1988 (in short the Act) is that on 7. 4. 2000 he was going to his village in a bus which was being driven by Awadhesh Patel and was owned by ram Prasad Pandey, who were arrayed as non-applicants no. 2 and 1, respectively in the claim petition. As soon as the claimant alighted from the bus, driver started and drove the bus rashly and negligently, as a result of which he fell down and rear wheel of the bus ran over the claimant, on account of which his left leg was brutally crushed and he also received injury in his right toe. The claimant sustained compound fracture as a result of which he became disabled. The claimant was treated in hospitals at Kotma, shahdol and Bilaspur and is still undergoing the treatment. He is now unable to walk. On these premised submissions, an application under section 166 of the Act was filed before the Claims tribunal praying therein to pass an award for a sum of rs. 6,10,000/-against the owner, driver and Insurer jointly and severally. ( 4. ) THE owner and driver filed joint written statement and admitted the accident but denied that bus was being driven rashly and negligently by the driver. The Insurer by filing separate written statement pleaded that on account of failure of payment of amount of premium, because the cheque was dishonoured, hence both, cover Note and policy were cancelled by the Insurer vide its letter dated 24. 8. 1999 and intimation was given to the owner of the bus, namely, Ram Prasad Pandey as well as to RTO, Bilaspur by registered post. 8. 1999 and intimation was given to the owner of the bus, namely, Ram Prasad Pandey as well as to RTO, Bilaspur by registered post. Thereafter, owner of the bus did not obtain any new policy after paying premium and therefore the Insurer is not liable to pay any compensation. ( 5. ) ON the basis of above-said pleadings, learned Tribunal framed as many as five issues and after recording the evidence of the parties, came to hold that amount of premium was received by the agent of the Insurer from the bus owner and the agent issued and submitted a cheque in the office of the Insurer which was dishonoured and, therefore, the Insurer cannot be exonerated from its liability. The learned Tribunal also came to hold that the driver of the bus was rash and negligent as a result of which the accident occurred in which claimant received injuries and hence, the tribunal passed an award of Rs. 57,000/-with 9% annual interest from the date of the filing of the claim petition. ( 6. ) IN this manner the above-said two appeals have been filed. ( 7. ) THE contention of Shri Rakesh Jain, learned counsel for the insurer is that on 7. 4. 2000 the accident occurred and the policy which was for a period from 13. 7. 1999 to 12. 7. 2000 was cancelled because the cheque dated 10. 7. 1999 was dishonoured and this was also intimated to Ram Prasad Pandey, the owner of the offending vehicle as well as to RTO, Bilaspur by sending intimation through speed Post on 22. 7. 1999. Thus, according to learned counsel since the policy was cancelled and thereafter the owner of the bus never obtained new policy by depositing the premium therefore no liability can be fastened on the Insurer. ( 8. 7. 1999. Thus, according to learned counsel since the policy was cancelled and thereafter the owner of the bus never obtained new policy by depositing the premium therefore no liability can be fastened on the Insurer. ( 8. ) ON the other hand, Shri Shiv Kumar Dubey, learned counsel appearing for the owner and driver argued that Anil Sav (NAW-2), who is Assistant Administrative Officer of the Insurance Company in his evidence has admitted that amount of premium through cheque issued by the agent of the Insurance Company was deposited in the Bank which was dishonoured and, therefore, Insurer is liable for the act of its agent and for this reason the learned Tribunal has rightly fastened the liability on the Insurer jointly and severally along with the owner and driver of the offending vehicle. ( 9. ) SHRI Anil Dwivedi, learned counsel for the claimant by pressing his appeal (M. A. No. 456/2005) has submitted that looking to the injuries sustained by the claimant award of Rs. 57,000/passed by learned Claims Tribunal is on lower side. ( 10. ) HAVING heard learned counsel for the parties, we are of the view that M. A. No. 70/2005 filed by the Insurer deserves to be dismissed and M. A. No. 456/2005 filed by the claimant deserves to be allowed in part. ( 11. ) IT is not disputed that after receiving the cheque no. 331804 dated 10. 7. 1999 towards payment of premium Cover Note no. 485808 was issued by the Insurance Company to the owner of vehicle. Thus, issuance of the Cover Note of the policy is not disputed. On going through para 24 of the written statement filed on behalf of Insurance Company it is gathered that when the said cheque was presented in the Bank, same was dishonoured as a result of which Cover Note and Insurance Policy were cancelled by the Insurance Company on 24. 8. 99 and the intimation in this regard was sent to the owner of the vehicle, namely, Ram Prasad pandey and also to RTO, Bilaspur by registered post. ( 12. ) THE moot question which is to be decided is whether on account of cancellation of policy, still the Insurance Company is liable to pay compensation. 8. 99 and the intimation in this regard was sent to the owner of the vehicle, namely, Ram Prasad pandey and also to RTO, Bilaspur by registered post. ( 12. ) THE moot question which is to be decided is whether on account of cancellation of policy, still the Insurance Company is liable to pay compensation. We do not find any force in the contention of learned counsel for the Insurer that after the cancellation of the policy, no new policy was obtained by the owner of the bus and, therefore, the Insurance Company is not liable to pay compensation because it has been specifically admitted by the assistant Administrative Officer of the Insurance Company Anil Sav (NAW-2) that cheque of the payment of premium amount was issued by the agent of the Insurance Company and the same was not given by owner of the bus Ram Prasad Pandey and the insurance company is also taking action against the agent. Further he has admitted that three different cheques which were issued by the agent were also dishonoured and for his latches Insurance company is taking action against his agent. Witness No. 3 of insurance Company Mathura Prasad Soni, who is Development officer of the Insurance Company has also admitted that Vijay kumar Tiwari was the agent of his company. The agent of the insurance Company was under him and this witness was supervising the work of the agent. This witness received complaint against agent Vijay Kumar Tiwari that after collecting cash amount of premium from the persons he was not depositing the amount so collected in the Bank and was also issuing Kachchi receipts to the persons from whom he collected the money. He has further admitted that vide cheque no. 331804 premium of Rs. 10,546/-was deposited. In the evidence of owner of the bus Ram Prasad pandey, it has come that he paid the amount of premium in cash to Vijay Kumar Tiwari, who is the agent of the Insurance Company. He has further admitted that vide cheque no. 331804 premium of Rs. 10,546/-was deposited. In the evidence of owner of the bus Ram Prasad pandey, it has come that he paid the amount of premium in cash to Vijay Kumar Tiwari, who is the agent of the Insurance Company. Thus, it is proved that agent of the Insurer collected the cash amount of the premium from owner of the bus and the agent issued cheque under his signature to the Insurer in respect to the payment of premium amount collected in cash by him and the said cheque was dishonoured and, therefore, according to us, since vijay Kumar Tiwari was the agent of the Insurance Company, any defaulting act of the agent, principal i. e. Insurer is liable. It is inter se dispute between the Insurance Company and its agent but the owner of the vehicle has nothing to do, as after paying the amount of premium in cash to the agent of the Insurer his act was over. He also received the Cover Note of the policy. According to us, if on account of the fault of the agent of the Insurer cheque of the amount of premium which he (agent) deposited under his signature was dishonoured, the owner of the vehicle cannot be made responsible and, therefore, Insurer cannot be absolved from its liability. ( 13. ) IT is proved that the amount of premium in cash was collected by Vijay Kumar Tiwari, agent of the Insurer and he was an authorised agent of the Insurance Company and, therefore, the principal i. e. Insurer is liable for the act of its agent. In this regard section 226 of Indian Contract Act, 1872 and illustration (b) to this section is very clear. In this regard section 226 of Indian Contract Act, 1872 and illustration (b) to this section is very clear. In Hambro v. Burnand and others (1904)2 Kings Bench 10 the scope of contract made by agent in name of principal, but in his own interests has been taken into consideration and it has been specifically held that where an agent, contracting on behalf of his principal, has acted within the terms of a written authority given to him by the principal, but the existence of which was not known to the other party to the contract, the principal cannot, if the other party has acted bona fide, repudiate liability on the contract on the ground that the agent, in making it, acted in his own interests, and not in those of his principal. Hence according to us, the principal (Insurance Company) is bound by the act of his agent with all its results. Their Lordship has further held that where authority was given to underwrite policies of insurance in the name of principal according to the ordinary course of business at Lloyds and the agent in fraud of the principal, underwrite certain guarantee policy, it was held that the principal was bound by the act of his agent. We are of the firm view that section 226 of the Contract Act assumes that the contract or act of the agent is one, which, as between the principal and third persons, is binding on the principal. ( 14. ) WE are borrowing sufficient light from Halsburys Laws of england (fourth Edition -Volume I) page 491, paras 817 and 818. In para 817 it has been laid down that as a general rule, a principal is responsible for all acts of his agent within the authority of the agent, whether the responsibility is contractual or tortious. Para 818 speaks that a principal is not exempt, where he would otherwise be liable in respect of an act done or bound by a contract made by his agent, by reason of the fact that the agent in doing it was acting in fraud of the principal, or otherwise to his detriment. Para 818 speaks that a principal is not exempt, where he would otherwise be liable in respect of an act done or bound by a contract made by his agent, by reason of the fact that the agent in doing it was acting in fraud of the principal, or otherwise to his detriment. A third party dealing in good faith with an agent, who acts within the apparent scope of his authority, and purports to act as agent, is not prejudiced by the fact that the agent is using his authority for his own benefit and not that of his principal. At this juncture, we have also gone through Corpus Juris Secumdum Volume III from pages 138 to 140. In para 231 at Page 138 it has been enunciated that a principal will be liable to third persons for all acts committed by the agent in his behalf within the actual or apparent scope of his agency. In the same paragraph 231 at page 141 very clearly it has been laid down that liability of principal will be present even though the acts are the result of the agents fraud. Sufficient light has been thrown in this para in respect to the liability of principal for the acts done by his agent to third persons and we would like to quote that passage which runs as under : "a principal is liable for the acts or his agent within his express authority, because the act of such agent is the act of the principal. Where the agent acts within the scope of the authority which the principal holds him out as possessing, nor knowingly permits him to assume, the principal is made responsible, because to permit to dispute the authority of the agent in such a case would be to enable him to commit a fraud upon innocent third parties. " (Emphasis supplied) ( 15. ) THE view of this Court is that if the contract is entered into or act done professedly on behalf of the principal, and is within the scope of the actual authority of the agent, there is no difficulty. " (Emphasis supplied) ( 15. ) THE view of this Court is that if the contract is entered into or act done professedly on behalf of the principal, and is within the scope of the actual authority of the agent, there is no difficulty. The motive of the agent is immaterial in such a case and the principal is bound though the contract may be entered into and the act done fraudulently in furtherance of the agents own interests, and contrary to the interests of the principal, provided the person dealing with the agent in good faith. We may further add that the transaction within the authority of the agent is valid, irrespective of whether same is beneficial to the principal or not. The Privy Council in the case of Bank of Bengal v. Ramanatham Chetty AIR 1915 PC 121 has held that the principal was liable for the act of the agent, the borrowing by the agent being an essential incident of the business and if authority is established the mere fact that the principal did not receive any benefit does not rid him of his liability. Thus, according to us, even where agent of the Insurance company has defrauded his principal, or the transaction made by him is to the detriment of the principal, the principal i. e. Insurance company will still be bound by the transaction made by the owner of the vehicle because the owner of the vehicle has acted in good faith, and his act is within the apparent scope of authority of the agent. There is no evidence on record that the owner of the vehicle has not acted in good faith and it was not in the domain of the agent to collect the cash amount of premium for the principal i. e. Insurance Company from the owner of the vehicle. Therefore, according to us the Insurer was not having any authority to cancel the policy. ( 16. ) THUS, according to us, learned Claims Tribunal did not commit any error in holding that the Insurer is also liable for the payment of compensation jointly and severally along with the owner and driver of the offending vehicle. ( 17. ) WE shall now advert ourselves to the appeal filed by the claimant for the enhancement of the award. ) THUS, according to us, learned Claims Tribunal did not commit any error in holding that the Insurer is also liable for the payment of compensation jointly and severally along with the owner and driver of the offending vehicle. ( 17. ) WE shall now advert ourselves to the appeal filed by the claimant for the enhancement of the award. On going through the impugned award as well as the pleadings and evidence placed on record, we are of the view that learned Claims Tribunal rightly came to the conclusion that on account of rash and negligent act of the driver of the offending vehicle, claimant Indrapal sustained serious injuries. On account of the accident and injuries sustained by the claimant he has to walk with the aid of crutches. On going through the disability certificate and looking to the evidence of the claimant as well as of Dr. O. P. Choudhary, we are of the view that claimant has sustained 40% disability. Dr. O. P. Choudhary (AW-3)has stated that he examined the claimant on 7. 4. 2000 (wrongly typed as "2002" because in medical report Ex. P-6 date 7. 4. 2000 has been mentioned) and found an incised wound, from buttock to thigh and there was avulsion of skin and the blood was oozing from the wound. On touching the knee cracking sound was heard and observed by the doctor. This doctor has also proved MLC certificate ex. P-6 which was brought by him, a copy of which Ex. P-6-A is in the record of Tribunal. The doctor has further stated that there was fracture of left patella bone. ( 18. ) THE learned Tribunal came to hold that the claimant/appellant was earning Rs. 2,000/-per month and he had undergone treatment for six months as well as he has become permanent disabled up-to the extent of 40%. The learned Tribunal has awarded Rs. 25,000/-towards partial disablement which according to us is on lower side. Since the appellant had become disabled up-to 40%, according to us, he is entitled to get rs. 80,000/-under this head. The learned Tribunal has awarded a sum of Rs. 15,000/-for treatment. According to us, the same is also on lower side. The appellant had undergone treatment for more than six months at different hospitals in different cities, therefore, according to us, he is entitled for Rs. 30,000/-under this head. 80,000/-under this head. The learned Tribunal has awarded a sum of Rs. 15,000/-for treatment. According to us, the same is also on lower side. The appellant had undergone treatment for more than six months at different hospitals in different cities, therefore, according to us, he is entitled for Rs. 30,000/-under this head. For pain and sufferings he is entitled for Rs. 10,000/ -. For loss of estate learned Tribunal has awarded a sum of Rs. 12,000/ -. However, learned Tribunal has not awarded any amount under the heads of special diet, conveyance etc. and we hereby assess rs. 20,000/-for the same. Thus, according to us, the appellant/claimant is entitled to get Rs. 1,52,000/- (Rs. One lac and fifty two thousand only ). He shall also be entitled for the interest at the rate of 7% per annum on the enhanced amount of compensation from the date of filing of the claim petition. ( 19. ) FOR the reasons stated here-in-above, M. A. No. 70/2005 which has been filed by the Insurance Company is hereby dismissed and m. A. No. 456/2005 filed by the claimant/appellant is hereby allowed to the extent indicated here-in-above with costs. Counsels fee rs. 2,000/-, if pre-certified.