BASANT, J.

1. This appeal under Section 30 of the Employees Compensation Act (hereinafter referred to, 'the Act') is preferred by the insurer who was the second opposite party before the Commissioner. The only substantial question of law sought to be canvassed before us is:

"whether the insurer is liable to discharge the liability under the Act of a transferee of a vehicle, the policy of insurance in respect of which is deemed to be transferred in his favour by the operation of Section 157 of the Motor Vehicles Act."

2. To the vitally relevant and crucial facts, first. There was a collision between a jeep and a car. The driver of the jeep succumbed to the injuries suffered in the accident. His dependents lodged the claim under the Act against the employer of the deceased. On the date of the accident, that employer was the owner of the jeep. The appellant is the insurer in respect of that vehicle. The registration certificate and the policy of insurance stood in the name of the transferor who had transferred the vehicle to the employer. It is not disputed that such transfer took place prior to the date of the accident.

3. The claimants contended and the Commissioner accepted that Section 157 of the Motor Vehicles Act does operate and thereby the transferee steps into the shoes of the transferor/insured person. Consequently, the insurer is liable to discharge the liability of the transferee/employer, it was held. The appellant insurance company, unsuccessfully contended that in respect of the liability under the Act, such deemed transfer shall not operate. Such transfer may operate only in respect of the liability under the Motor Vehicles Act, contended the appellant.

4. Certain legislative provisions must be visited again. Chapter XI of the Motor Vehicles Act, 1988 deals with "insurance of motor vehicles against third party risks". It is not any more the mere volition or option of an owner of a vehicle to insure his vehicle. Every vehicle must have a valid policy of insurance. Obviously, such a stipulation stems out of the compassion of the legislature conscious of the hardship which victims may face, if the discretion to have his vehicle insured were left to the owner. In such case, if owner is unable to meet liability, victim will be left in lurch. The scheme of Chapter XI is to identify the authorised insurers who alone can transact the business of vehicle insurance. All owners of vehicles and persons using the vehicles are bound to ensure that there is a valid policy of insurance in respect of such vehicles. Such policy of insurance must necessarily cover certain specified liabilities. The insurer and insured have no option in the matter of coverage of such compulsorily insurable liabilities/risks. The volition of the insured and the insurer is irrelevant. There must be a policy of insurance and such policy must necessarily cover the specific requirements of Section 147 of the Motor Vehicles Act, 1988.

5. Requirements of policies and limits of liabilities are stipulated under Section 147 of the Motor Vehicles Act. It is not necessary to advert to the other aspects. We are concerned in this case with the liability of the insured/employer under the Act in respect of a driver engaged in driving the vehicle. Proviso (i)(a) of Section 147 (1) of the Motor Vehicles Act makes it crystal clear beyond the pale of controversy that the compulsory policy of insurance must cover the liability under the Act of the employer/insured in respect of a driver engaged by him to drive the vehicle.

6. We may in this context advert and clarify that such liability in respect of the driver/victim is a liability which is compulsorily coverable and the driver of the vehicle of the insured must be deemed to be reckoned as a third party for the purpose of Chapter XI. Insurer and insured are the first and second parties to the Contract of Insurance and the victims who are covered by Section 147 are the third parties to the Contract of Insur