JUDGMENT : Asper A.K. Shrivastava , J . : - Thesetwo appeals have arisen out of an award dated 26th August, 2004 passed bylearned 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 claimapplication by setting aside the impugned award and M.A. No. 456/2005 has beenfiled by the claimant for enhancement of the award. Since both these appealshave arisen out of a common award, they are being disposed of by this commonorder. 3.In brief the case of claimant Indrapal as borne outfrom the application under Section 166 of the Motor Vehicles Act, 1988 (inshort 'the Act') is that on 7-4-2000 he was going to his village in a bus whichwas being driven by Awadhesh Patel and was owned byRam Prasad Pandey , who were arrayed as non-applicantNos. 2 and 1, respectively in the claim petition. As soon as the claimantalighted 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 theclaimant, on account of which his left leg was brutally crushed and he alsoreceived injury in his right toe. The claimant sustained compound fracture as aresult of which he became disabled. The claimant was treated in hospitals at Kotma , Shahdol and Bilaspur and is still undergoing the treatment. He is nowunable to walk. On these premised submissions, an application under Section 166of the Act was filed before the Claims Tribunal praying therein to pass anaward 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 accidentbut denied that bus was being driven rashly and negligently by the driver. TheInsurer by filing separate written statement pleaded that on account of failureof payment of amount of premium, because the cheque was dishonoured , hence both, cover note and policywere cancelled by the Insurer vide its letter dated 24-8-1999 and intimationwas 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 premiumand therefore the Insurer is not liable to pay any compensation. 5.On the basis of above-said pleadings, learned Tribunal framed as many as fiveissues and after recording the evidence of the parties, came to hold thatamount of premium was received by the agent of the Insurer from the bus ownerand the agent issued and submitted a cheque in theoffice of the Insurer which was dishonoured and,therefore, the Insurer cannot be exonerated from its liability. The learnedTribunal also came to hold that the driver of the bus was rash and negligent asa result of which the accident occurred in which claimant received injuries andhence, 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 occurredand the policy which was for a period from 13-7-1999 to 12-7-2000 was cancelledbecause 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 toRTO, Bilaspur by sending intimation through SpeedPost on 22-7-1999. Thus, according to learned Counsel since the policy wascancelled and thereafter the owner of the bus never obtained new policy bydepositing the premium therefore no liability can befastened on the Insurer. 8.On the other hand, Shri Shiv Kumar Dubey , learned Counsel appearing for the ownerand driver argued that Anil Sav (NAW 2), who isAssistant Administrative Officer of the Insurance Company in his evidence hasadmitted that amount of premium through cheque issuedby the agent of the Insurance Company was deposited in the Bank, which was dishonoured and, therefore, Insurer is liable for the actof its agent and for this reason the learned Tribunal has rightly fastened theliability on the Insurer jointly and severally along with the owner and driverof the offending vehicle. 9. Shri Anil Dwivedi , learnedCounsel for the claimant by pressing his appeal (M.A. No. 456/2005) hassubmitted that looking to the injuries sustained by the claimant award of Rs . 57,000/- passed by learned Claims Tribunal is on lowerside. 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. 456/2005filed by the claimant deserves to be allowed in part. 57,000/- passed by learned Claims Tribunal is on lowerside. 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. 456/2005filed 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 wasissued by the Insurance Company to the owner of vehicle. Thus, issuance of theCover Note of the policy is not disputed. On going through Para 24 of the writtenstatement filed on behalf of Insurance Company it is gathered that when thesaid cheque was presented in the Bank, same was dishonoured as a result of which Cover Note and InsurancePolicy were cancelled by the Insurance Company on 24-8-1999 and the intimationin 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 cancellationof policy, still the Insurance Company is liable to pay compensation. We do notfind any force in the contention of learned Counsel for the Insurer that afterthe cancellation of the policy, no new policy was obtained by the owner of thebus and, therefore, the Insurance Company is not liable to pay compensationbecause it has been specifically admitted by the Assistant AdministrativeOfficer of the Insurance Company Anil Sav (NAW 2)that cheque of the payment of premium amount wasissued by the agent of the Insurance Company and the same was not given byowner of the bus Ram Prasad Pandey and the InsuranceCompany is also taking action against the agent. Further he has admitted thatthree different cheques which were issued by theagent were also dishonoured and for his laches Insurance Company is taking action against hisagent. Witness No. 3 of Insurance Company Mathura Prasad Soni , who is Development Officer of theInsurance Company has also admitted that Vijay Kumar Tiwari was the agent of his company. The agent of theInsurance Company was under him and this witness was supervising the work ofthe agent. This witness received complaint against agent Vijay Kumar Tiwari that after collecting cash amount of premium fromthe persons he was not depositing the amount so collected in the Bank and wasalso issuing Kachchi receipts to the persons fromwhom he collected the money. The agent of theInsurance Company was under him and this witness was supervising the work ofthe agent. This witness received complaint against agent Vijay Kumar Tiwari that after collecting cash amount of premium fromthe persons he was not depositing the amount so collected in the Bank and wasalso issuing Kachchi receipts to the persons fromwhom 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 the premiumin cash to Vijay Kumar Tiwari , who is the agent ofthe Insurance Company. Thus, it is proved that agent of the Insurer collectedthe cash amount of the premium from owner of the bus and the agent issued cheque under his signature to the Insurer in respect to thepayment 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 Companyand its agent but the owner of the vehicle has nothing to do, as after payingthe amount of premium in cash to the agent of the Insurer his act was over. Healso received the Cover Note of the policy. According to us, if on account ofthe fault of the agent of the Insurer cheque of theamount of premium which he (agent) deposited under his signature was dishonoured , the owner of the vehicle cannot be maderesponsible and, therefore, Insurer cannot be absolved form 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 regardSection 226 of Indian Contract Act, 1872 and Illustration (b) to this sectionis very clear. In Hambro Vs. In this regardSection 226 of Indian Contract Act, 1872 and Illustration (b) to this sectionis very clear. In Hambro Vs. Bumand and others, (1904) 2 King's Bench 10, the scope of contract made by agent inname of principal, but in his own interests has been taken into considerationand it has been specifically held that where an agent, contracting on behalf ofhis principal, has acted within the terms of a written authority given to himby the principal, but the existence of which was not known to the other partyto the contract, the principal cannot, if the other party has acted bonafide , repudiate liability on the contract on the groundthat the agent, in making it, acted in his own interests, and not in those ofhis principal. Hence, according to us, the principal (Insurance Company) isbound by the act of his agent with all its results. Their Lordship has furtherheld that where authority was given to underwrite policies of insurance in thename of principal according to the ordinary course of business at Lloyd's andthe agent in fraud of the principal, underwrite certain guarantee policy, itwas held that the principal was bound by the act of his agent. We are of thefirm view that Section 226 of the Contract Act assumes that the contract or actof the agent is one, which, as between the principal and third persons, isbinding on the principal. 14.We are borrowing sufficient light from Halsbury's 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, aprincipal is responsible for all acts of his agent within the authority of theagent, whether the responsibility is contractual or tortious .Para 818 speaks that a principal is not exempt, where he would otherwise beliable in respect of an act done or bound by a contract made by his agent, byreason of the fact that the agent in doing it was acting in fraud of theprincipal, or otherwise to his detriment. A third party dealing in good faithwith an agent, who acts within the apparent scope of his authority, andpurports to act as agent, is not prejudiced by the fact that the agent is usinghis authority for his own benefit and not that of his principal. At this juncture,we have also gone through Corpus Juris Secundum Vol. Ill from Pages 138 to 140. At this juncture,we have also gone through Corpus Juris Secundum Vol. Ill from Pages 138 to 140. In Para 231 atPage 138 it has been enunciated that a principal will be liable to thirdpersons for all acts committed by the agent in his behalf within the actual orapparent scope of his agency. In the same Paragraph 231 at Page 141 veryclearly it has been laid down that liability of principal will be present eventhough the acts are the result of the agent's fraud. Sufficient light has beenthrown in this para in respect to the liability ofprincipal for the acts done by his agent to third persons and we would like toquote that passage which runs as under : - "Aprincipal 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 actswithin the scope of the authority which the principal holds him out as possessing , nor knowingly permits him to assume, theprincipal is made responsible, because to permit to dispute the authority of theagent in such a case would be to enable him to commit a fraud upon innocentthird parties". (Emphasis supplied) 15.The view of this Court is that if the contract is enteredinto or act done professedly on behalf of the principal, and is withinthe scope of the actual authority of the agent, there is no difficulty. Themotive of the agent is immaterial in such a case and the principal is boundthough the contract may be entered into and the act done fraudulently infurtherance of the agent's own interests, and contrary to the interests of theprincipal, provided the person dealing with the agent in good faith. We mayfurther add that the transaction within the authority of the agent is valid,irrespective of whether same is beneficial to the principal or not. The PrivyCouncil in the case of Bank of Bengal Vs. Ramanatham Chetty , AIR 1915 PC 121 , has held that the principal wasliable for the act of the agent, the borrowing by the agent being an essentialincident of the business and if authority is established the mere fact that theprincipal did not receive any benefit does not rid him of his liability. Ramanatham Chetty , AIR 1915 PC 121 , has held that the principal wasliable for the act of the agent, the borrowing by the agent being an essentialincident of the business and if authority is established the mere fact that theprincipal 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 hisprincipal, 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 transactionmade by the owner of the vehicle because the owner of the vehicle has acted ingood 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 ingood faith and it was not in the domain of the agent to collect the cash amountof premium for the principal, i.e., Insurance Company from the owner of thevehicle. Therefore, according to us the Insurer was not having any authority tocancel the policy. 16.Thus, according to us, learned Claims Tribunal did not commit any error inholding that the Insurer is also liable for the payment of compensation jointlyand 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 theenhancement of the award. On going through the impugned award as well as thepleadings and evidence placed on record, we are of the view that learned ClaimsTribunal rightly came to the conclusion that on account of rash and negligentact of the driver of the offending vehicle, claimant Indrapal sustained serious injuries. On account of the accident and injuries sustainedby the claimant he has to walk with the aid of crutches. On going through thedisability certificate and looking to the evidence of the claimant as well asof Dr. O.P. Choudhary , we are of the view thatclaimant has sustained 40% disability. Dr. O.P. Choudhary (A.W. 3) has stated that he examined the claimant on 7-4-2000 (wrongly typed as "2002"because in medical report Exh . P-6, dated 7-4-2000 has been mentioned) and foundan incised wound, from buttock to thigh and there was avulsion of skin and theblood was going from the wound. On touching the knee cracking sound was heardand observed by the doctor. This doctor has also proved MLC certificate ( Exh . P-6, dated 7-4-2000 has been mentioned) and foundan incised wound, from buttock to thigh and there was avulsion of skin and theblood was going from the wound. On touching the knee cracking sound was heardand observed by the doctor. This doctor has also proved MLC certificate ( Exh . P-6), which was brought by him, acopy of which Exh . P-6-A is in the record ofTribunal. The doctor has further stated that there was fracture of left patellabone. 18.The learned Tribunal came to hold that the claimant/appellant was earning Rs . 2,000/- per month and he had undergone treatment forsix months as well as he has become permanent disabled upto 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 upto 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 isalso on lower side. The appellant had undergone treatment for more than sixmonths 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 hasawarded a sum of Rs . 12.000/-. However, learnedTribunal has not awarded any amount under the heads of special diet, conveyanceetc. 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 /- (Rupees One lac and fifty two thousand only). He shall also be entitledfor the interest at the rate of 7% per annum on the enhanced amount ofcompensation from the date of filing of the claim petition. 19.For the reasons stated hereinabove, M.A. No. 70/2005 which has been filed bythe Insurance Company is hereby dismissed and M.A. No. 456/2005 filed by theclaimant/appellant is hereby allowed to the extent indicated hereinabove withcosts. Counsel's fee Rs . 2,000/-, if pre-certified.