( 1 ) THIS C. M. A. arises out of a claim petition filed under Section 110-A of the Motor Vehicles Act (hereinafter referred to as the Act ). The first respondent herein was travelling in the lorry bearing No. AIK 716 from kunta to Bhadrachalam on the night of 28-6-1987. When the lorry was reaching Gundala village in the early hours of 29-6-1987, the lorry met with an accident. Alleging that the accident is anributable to the rash and negligent driving of the driver (the second respondent herein); that his right leg was fractured in the accident; that his leg was amputated below the knee and that the driver having admitted his guilt was convicted in c. C. No. 49 of 1987 and sentenced under Section 338 of the Indian Penal code by the Sub Divisional Magistrate, Bhadrachalam the claimant filed the claim petition claiming compensation of Rs. 3,00,000/-

( 2 ) THE appellant-Insurance Company alone contested the claim petition on the grounds that the liability of the Insurance Company would not exceed Rs. 12,000/- as per the Policy; that the claim-petitioner was travelling in the lorry as an un-authorised passenger; that travelling in a goods vehicle being prohibited under law, there is violation of the terms of the policy and as such, the Insurance Company is not liable to pay any compensation.

( 3 ) THE learned Additional District Judge, Khammam (Motor accident Claims Tribunal) on an appreciation of the oral and documentary evidence adduced before him came to the conclusion that the accident occurred because of the rash and negligent driving of the lorry by its driver and that the claimant is entitled to compensation of Rs. 50,000/- towards pain and sufferring and loss of amenities for life, Rs. 5,000/- towards medical expenses, treatment and other incidential expenses and Rs. 99,900/- towards loss of past earnings and present value of future earnings making a total of Rs. 1,54,900/ -. He further held that the claimant was travelling in the goods vehicle along with the goods after paying hire charges to the owner of the lorry or its driver; that in that view of the matter, there is no violation of the terms of the Policy and that as such, the Insurance Company is liable to pay compensation. He accordingly granted a decree in favour of the claimant for Rs. 1,54,900/- with interest at 12% per annum from the date of the claim petition till the date of payment jointly and severally against the driver of the lorry, owner of the lorry and the Insurance company.

( 4 ) AGGRIEVED by the said decree, the Insurance Company preferred the above appeal challenging its liability to pay the compensation awarded to the claimant.

( 5 ) THE learned counsel for the appellant argued that as per the allegations in the petition, the first respondent herein was travelling in the body of the lorry but not in the cabin; that Rule 277 (2) of the Andhra pradesh Motor Vehicles Rules (hereinafter referred to as "the Rules") prohibits that; that the claimant has not filed any document such as the lorry receipt to show that he was travelling in the lorry as the owner of the goods; thai even assuming that he is the owner of the goods, he is not entitled io sit in a manner endangering his person; that he should have travelled in the cabin; that the petitioner being a mid-way passenger, there is no contract between the owner of the lorry and the passenger and that there is no evidence that the driver was authorised to carry the passenger. He relied upon the decision in M. Kandaswamy Filial vs. Chinnaswamy in support of his contention that when the injured has boarded the lorry mid-way along with the goods and the lorry met with an accident due to negligence of the lorry driver, it cannot be inferred that there was an implied contract of employment between the owner of the lorry and the injured and hence the Insurance Company cannot be held liable. In that case, some decisions of Karnataka High Court and Bombay High Court were referred to the Divis