S.B Sinha, J.:—This writ petition involves a short but interesting question of law.

2. The petitioner is an insurance company and a truck bearing registration no. BRJ 4221 belonging to respondent no. 3 was insured with it. Kuldip Singh (respondent no. 2) who was a driver of respondent no. 3 of the said truck met with an accident no. 16.3.78 causing serious injuries on his person and as a result whereof one of his legs had to be amputated. Respondent no. 2 filed an application before the Presiding Officer, Labour Court under the provisions of Workmen's Compensation Act, 1923 (hereinafter referred to as the Compensation Act) claiming compensation for meeting with the aforesaid accident, which acc ording to him, arose out of and in course of employment. In the said proceeding the petitioner-company was also a party.

3. For the purpose of disposal of this application only shore facts which are required to be noted is that by order dated 4th August, 1983 passed in W.C Case no. 17/78, respondent no. 1 allowed a petition by awarding compensation to the extent of Rs. 30,240/- and further directed that the aforementioned amount be paid by the petitioner-company to the respondent no. 2.

4. The only question raised by Sri Birendra Kumar Sinha, learned counsel appearing on behalf of the petitioner, is that the workmen Compensation Act is a self-contained Code and the liability of the petitioner would arise only if the case comes within the purview of section 14 of the Compensation Act. He submits that under the aforementioned provision the Insurance Company's liability comes into being only when the employer becomes an insolvent. He further submits that the liability of the Insurance Company to indemnify to the owner of the insured vehicle arises only in the event a claim petition is filed before the Claim Tribunal in terms of the provisions of section 110 of the Motor Vehicles Act, 1939 (hereinafter referred to as the Act). Reliance in this connection has been placed by the learned counsel on the case of R.B Moondra and Co. v. Mat. Bhanwari (1970 Labour and Industrial Casts 695).

5. Mr. Satya Narain Sharma, learned counsel appearing on behalf of respondent no. 2, however, submitted that section 14 of the Compensation Act has lost much of its force and cannot now be taken recourse to in view of the fact that covering the risk of a driver, Khalasi etc. and also insuring the vehicles is now a statutory must. He submits that the liability of the owner to get the vehicle insured is a statutory liability so far as the driver is concerned. Developing his argument the learned counsel submits that extensive amendments were carried out in the Motor Vehicles Act with regard to the aforementioned provisions of getting the vehicle insured much after the Compensation Act came into force and as such section 14 thereof shall have no application whatsoever in the facts and circumstances of this case.

6. section 14 of the Compensation Act reads as follows:—

“14. Insolvency of employer:—(1) Where any employer has entered into a contract with any insurers in respect of any liability under this Act to any workman, then in the event of the employer becoming insolvent or making composition or scheme of arrangement with his creditors, or if the employer is a company, in the event of the company having commenced to be wound up, the rights of the employer against the insurers as respects that liability shall, notwithstanding anything in any law for the time being in force relating to insolvency or the winding up of companies, be transferred to and vest in the workman, and upon any such transfer the insurers shall have the same rights and remedies and be subject to the same liabilities as if they were the employ yer, so, however, that the insurers shall not be under any greater liability to the workman than they would have been under to the employer.”

“(2). If the liability of the insurers to the workman is less than the liability of the employer to the workman, the workman may prove for the balance in the insolvency proceeding or liquidation.”

“(3). Where in any case such as is referred to in sub-section (1) the contract of the employer with the insurers is void or voidable by reason of non compliance on the part of the employer with any terms or conditions of the contract other than a stipulation for the payment of premia, the provisions of that sub-section shall apply as if the contract were not void or voidable and the insurers shall be entitled to prove in the insolvency proceedings or liquidation for the amount paid to the workman;

Provided that the provisions of this sub-section shall not apply in any case in which the workman tails to give notice to the insurers if the happening of the accident and of any resulting disablement as soon as practicable after he becomes aware of the institution of the insolvency or liquidation proceedings.”

“(4). There shall be deemed to be included among the debts which under section 49 of the Presidency Towns Insolvency Act, 1909 (III of 1909), or under section 61 of the Provincial Insolvency Act 1920 (V of 1920), or under section 230 of the Indian Companies Act, 1913 (VII of 1913), are in the distribution of the property of an insolvent or in the distribution of the assets of a company being wound up to be paid in priority to all other debts, the amount due in respect of any compensation the liability where for accrued before the date of the order of adjudication of the insolvent of the date or the commencement of the winding up, as the case may be and those Acts shall have effect accordingly.”

“(5) Where the compensation is a half-monthly payment, the amount due in respect thereof, shall, for the purpose of this section, be taken to be the amount of the lump sum for which the half monthly payment could, if redeemable, be redeemed if application were made for that purpose under section 7, and a certificate of the Commissioner as to the amount of such sum shall be conclusive proof thereof.”

“(6) The provisions of sub-section (4) shall apply in the case of any amount for which the insurer is entitled to prove under sub-section (3), but otherwise those provisions shall not apply where the insolvent or the company being wound up has entered into such a contract with insurer as is referred to be sub-section (1).”

“(7) This section shall not apply where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company.”

7. There cannot be any doubt that the employer and insurer are absolutely separate and distinct persons and under the provisions of the said Act the insurer does not ipso facto becomes liable only because the employer has been held to be so. Under the provisions of section 14 of the Compensation Act, the liability of the insurer comes into being only in the event one or the other condition mentioned therein is fulfilled. However, from a perusal of the aforementioned provision it would be evident that the said provisions apply only if the employer had entered into a contract with any insurer in respect of any liability under the Compensation Act, (underlining is mine for the sake of emphasis). Therefore, it is absolutely clear that section 14 contemplates two situations-(i) that a contract must be entered into by an employer with an insurer in respect of the liability of the workman and (ii) such liability must arise under the said Act.

8. However, the situation is now completely changed in view of the extensive amendment made in Chapter VIII of the Motor Vehicles Act as noticed hereinafter. The Motor Vehicles Act was enacted in the year 1939. Chapter VIII of the Act provides for insurance of motor vehicles against 3rd party risk. Under the provisions of the Act also a test of competence to drive is provided for and such person who passes the test of competence only can be granted a licence to drive the vehicles.

9. Under the provisions of section 94 of the Act, a person is prohibited from using a motor vehicle in a public place unless the same is covered by a policy of insurance complying with the requirement of the said Chapter. Under sub-section (4) of section 95 of the Act the policy shall be by way of a certificate of insurance in the prescribed form within the meaning of section 93(b) of the Act. Section 95(1)(b) of the Act provides that in order to comply with the requirements of the said Chapter a policy of insurauce must be a policy which insures the person or classes of persons specified in the policy to the extent specified in sub-section (2). Proviso to the aforementioned provision specifically covers the case of an employee engaged in driving the vehicle. Under section 96(1) and (2) a statutory duty has been cast upon the insurer to satisfy the judgment against persons insured in respect of 3rd party's risk. Section 96 of the Act further provides for other rights, liability and obligation on the part of the insurer.

10. Although a Tribunal has been set up to entertain a claim arising out of an accident, by reason of use of a motor vehicle and an elaborate procedure has been laid down therefor but so far as an employee is concerned a separate option has been conferred upon him either to prefer a claim under section 110 of the Act or under the provision of Compensation Act, but not under the both as contained in Section 110-AA of the Act.

11. In view of the aforementioned provision of section 110-AA of the Act, a provision has been made enabling a person to adjudicate the forum. In my opinion, the very fact that the Motor Vehicle Act itself has made an exception with regard to an employee the same clearly demonstrates that a person, only because he prefers a claim under the Compensation Act and not under the Act, does not thereby ipsofacto loses his statutory right nor the insurer is absolved from its statutory liability to indemnify the owner of a vehicle to the extent it is made statutorily liable.

12. It is now well settled that a policy of insurance is entered into so that the insured may be indemnified by the insurer in the event it becomes liable to pay compensation in respect of the matters covered under the insurance policy and for which certificate of insurance has been obtained by him. From a perusal for the provisions of section 96 of the Act it is evident that the liability of the insurer extends to a case even where it is not made party as in that event also an award of compensation may be executed as against the insurer. From the scheme of the Act it is evident that the rights and liabilities of both the insurer as also the insured are statutory ones. In view of the statutory liability imposed upon the Insurer by reasons of the provisions engrafted in the Act, in my opinion, it cannot escape such liability only because a claim has been filed by an insured under the Compensation Act and not under the M.V Act. In this connection reference may be made to the cases of The Northern India Motor Owners Insurance Co. Ltd., Bombay v. Magan Shanaji Solanki (1974 Lab. I.C 72), The New India Assurance Co. Ltd. v. Smt. Fatmabai (1982 Lab I.C 732), New India Assurance Co. v. M. Jayarama Naik (1982 Lab. I.C 1235) and New India Assurance Co. Ltd. Dehradun v. Smt. Darshani Devi (1984 Lab. I.C 489). I respectfully agree with the aforementioned decisions.

13. In the result, the application is dismissed.

14. By an order dated 20th January, 1984 a Bench of this Court while admitting this application stayed the operation of the order as contained in annexure-3. In that view of the matter, the petitioner is hereby directed to pay the amount as directed by the respondent no. 1 in its order dated 4.8.83 as contained in annexure-3 to this petition with interest at the rate of 12 per cent per annum. On the facts and in the circumstances of the case, respondent no. 2 shall also be entitled to cost of this petition from the petitioner which is quantified at Rs. 1,000/-.