IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Cross Objection No.44-CII of 2004 in/and FAO No.538 of 2003 (O&M) Date of decision:05.10.2010 National Insurance Company Limited ....Appellant versus Kavita Khan and others ...Respondents II. Cross Objection No.15-CII of 2004 in/and FAO No.534 of 2003(O&M) III. Cross Objection No.14-CII of 2004 in/and FAO No.535 of 2003(O&M) IV. Cross Objection No.13-CII of 2004 in/and FAO No.536 of 2003(O&M) National Insurance Company Limited ....Appellant versus Sarita Sharma alias Sarita Rani and others ...Respondents V. Cross Objection No.16-CII of 2004 in/and FAO No.537 of 2003(O&M) National Insurance Company Limited ....Appellant versus Shelly and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. L.M.Suri, Senior Advocate, with Mr. Neeraj Khanna, Advocate, for the appellant. Mr. Vishal Goel, Advocate, for Mr. P.K.Gupta, Advocate, for the respondents. ---- Cross Objection No.44-CII of 2004 in/and FAO No.538 of 2003 (O&M) - 2 - 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters or not ? 3. Whether the judgment should be reported in the digest ? ---- K.Kannan, J. (Oral) 1. In all the above five cases, the Insurance Company is in appeal against the award passed on the issue of liability pointing out to the fact that the evidence had been led through a Clerk from the RTO, Amritsar to the effect that the particular Driving Licence No.1604, dated 29.04.1993 had not been issued in favour of the driver. The Tribunal, however, rejected the contention by an observation which is not borne out through the record that there had been a bomb blast on the premises and all the original records had been lost. He, therefore, found that the particular driving licence with the seal of the licensing authority could not be vouched to be not genuine when the original records must have been lost. It also took note of the fact that there had been subsequent renewals of licence and such renewals must have been made only after verifying with the original issue and hence made an inference that the licence ought to have been only genuine. 2. The learned senior counsel for the insurer would contend that the case must be decided only on the evidence brought before the Court and could not be decided by factors within the peculiar knowledge of the presiding officer especially when there was no evidence led with reference to the bomb blast and the loss to original records. Even without joining issues on whether a bomb blast did occur and whether the records had been lost or not, the insured will have the benefit of Cross Objection No.44-CII of 2004 in/and FAO No.538 of 2003 (O&M) - 3 - evidence of RW6, who claimed that there was a power of attorney for the insured and he had engaged the driver. He spoken from his personal knowledge that he had verified the driving licence and he believed that to be true. This, in my view, would sufficiently protect the interest of the insured. 3. There is a still minor legal issue left as to whether knowledge of power of attorney could be attributed to the knowledge of the principal himself. This is a more a mixed question of fact and law than an issue of liability. It has been held by a decision of the Hon'ble Supreme Court in Haryana State Industrial Development Corporation Versus Cork Mfg. Co.-(2007) 8 SCC 120 that an adverse inference could be drawn by the non-examination of a principal in a case where an agent could not have had personal knowledge on certain facts which were required to be stated before Court. In this case, the power of attorney has given evidence of a factual situation of the engaging a driver and carrying out the inspection of the licence on behalf of his principal. I would, therefore, hold that the bona fide belief of such a power of attorney could enure to the benefit of the principal as well and the insured will have, therefore, a right of indemnity, for, the breach of violation of terms of the policy must be seen to be that of the insured and in this context, it could apply even to the benefits secured through the belief of the power of attorney. In the view of law laid down by the Hon'ble Supreme Court in National Insurance Company Limited Versus. Swaran Singh (2004) 3 SCC 279, the insured would be liable if the insured had been led to believe that the driving licence was genuine. Cross Objection No.44-CII of 2004 in/and FAO No.538 of 2003 (O&M) - 4 - All the appeals except FAO No.538 of 2003 filed by the insurer, therefore, stand dismissed. 4. FAO No.538 of 2003 addresses the claim for damages to the vehicle caused by the collision with the insured's vehicle. The Tribunal assessed the compensation at Rs.20,000/- and made the insurer liable. The learned counsel would contend that the liability of the insurer for damage to third party vehicle was restricted to Rs.6,000/- in the manner provided under Section 147(2) and there was no extra premium paid for claim for unlimited damages. It was an Act only policy. The liability of the insurer, therefore, shall be restricted only to Rs.6,000/- with interest and the remaining shall be recovered only from the insured. 5. The appeal is allowed to the extent restricting the liability in the manner referred to above. 6. There are also appeals for enhancement by the claimants in Cross Objection Nos.44, 13, 14, 15 and 16-CII of 2004 but no substantial arguments are advanced to make ground for their enhancement. I affirm the awards and dismiss the appeals filed for enhancement. (K.KANNAN) JUDGE 05.10.2010 sanjeev