JUDGMENT PADHYE J. - This is a plaintiff-appeal whose suit for the recovery of the amount on an insurance policy has been dismissed by the trial Court. The insurance was originally taken with the Indian Mercantile Insurance Company Limited, but subsequently the Life Insurance Corporation of India took over the management of all the Life Insurance Companies including the Indian Mercantile Company Limited with effect from September 1, 1956 and hence the defendant Life Insurance Corporation of India is held liable for the claim. The original policy which bears the No. 36348 with the Indian Mercantile Insurance Company Limited was for an amount of Rs. 50,000 on joint lives of the present plaintiff and his wife, deceased Kamalabai. Prior to the taking of the instant insurance, the plaintiff had made earlier another proposal on the joint lives of himself and his wife Kamalabai with the Ruby General Insurance Company Limited for a sum of Rs. 30,000 on April 17, 1956. With this proposal the assured, namely, the plaintiff and his wife had given their personal statements and the agent through whom the policy was taken also made his report and the proposal being for a sum in excess of Rs. 25,000, medical examiners report was also submitted. The medical examiner had to fill in two forms, one based on the answers given by the assured and the second on his medical examination of the assured. The Ruby General Insurance Company, however, did not accept the proposal for the sum of Rs. 30,000 as proposed, but was willing to insure the joint lives for a sum of Rs. 10,000. The counter proposal of the Ruby General Insurance Company WB&, however, not acceptable to the proposers and by a letter addressed by one G. V. Pendhari, who was an Insurance Agent to the Life Superintendent, Ruby General Insurance Company Limited, with copy to the Provisional Manager, Bombay, he informed the Ruby General Insurance Company that the proposers were not willing to complete the same and the proposal may be cancelled without any liability. A letter was also addressed by the plaintiff on August 6, 1956 to the Divisional Manager, Ruby General Insurance Company Limited, Bombay informing it that since the Company was accepting the proposal only for an amount of Rs. 10,000 he was unable to complete its proposal since his proposal had not been accepted as proposed. A letter was also addressed by the plaintiff on August 6, 1956 to the Divisional Manager, Ruby General Insurance Company Limited, Bombay informing it that since the Company was accepting the proposal only for an amount of Rs. 10,000 he was unable to complete its proposal since his proposal had not been accepted as proposed. It is, however, not known as to when the Counter proposal to accept the insurance for Rs. 10,000 was made by the Ruby General Insurance Company. According to the plaintiff, he came to know about the reduced proposal on August 5, 1956 through the agent; whereas according to the defendant, the plaintiff must have come to know about this reduced proposal even before the proposal to the Indian Mercantile Insurance Company Limited was made by the plaintiff and his wife. 2. The plaintiff states in the plaint that a proposal for insurance on the joint lives of the plaintiff and his wife was made on July 15, 1956 with the Indian Mercantile Insurance Company for a sum of Rs. 40,000. There are, however, two proposal forms which are Exhs. D-2 and D-4 of July 15, 1956 and July 23, 1956. In these proposal forms the proposed assured gave the details which are required to be answered as per the questionnaire in the proposal forms. Questions Nos. 7 and 8 in the said proposal forms seek information as to whether any proposal on the proposers life has been or is about to be made to any other Company or Companies and question No.8 requires the proposer to say whether he has been insured in this or any other Company. Question No.9 seeks information as to the result of such proposal. The answer to question No. 7 was given in the negative and in answer to the question No.8, the proposers stated that they were insured with the Ruby General Insurance Company Ltd. for an amount of Rs. 30,000 for the joint life and in answer to the question No.9 (d) which is: "has the proposal been accepted on terms otherwise than as proposed? If so, give full particulars", the answer is in the negative. In this proposal, the monthly income of the plaintiff who was the only earning member has been given as Rs. 600. At the end of this proposal, there is a declaration which is required to be signed by the proposers. If so, give full particulars", the answer is in the negative. In this proposal, the monthly income of the plaintiff who was the only earning member has been given as Rs. 600. At the end of this proposal, there is a declaration which is required to be signed by the proposers. The material portion of this declaration is as under: "I further declare that the above statement and answers are true in every particular and that I have not withheld or concealed any information or circumstance affecting the risk of an assurance on my life, and I agree that this statement and declaration along with a further statement made or to be made before the Medical Examiner and declaration relative thereto or any other declaration of insurability in lieu thereof, whether written in my hand or not and such evidence of age as is or may be produced, shall be the basis of the contract between me and the Indian Mercantile Insurance Co., Ltd. (emphasis supplied) and that if any untrue averment be contained therein the contract of assurance shall be absolutely null and void." Further material part is : "I do hereby further declare that this proposal shall not be deemed to be accepted by the Company unless and until the acceptance letter is issued by the Head Office of the Company and is received by me and the full premium indicated in the letter of acceptance has been paid to the Company together with any other requirements called for in accordance with the terms of the letter of acceptance and the first premium receipt as issued by the Company. Any payment made by me by way of estimated first premium before the acceptance letter is issued shall be kept in suspense to my credit and if the proposal is accepted, shall be applied towards payment of the full premium indicated in the letter of acceptance. " 3. The proposal is also required to be accompanied by a personal statement of the assured which is recorded by a Medical Examiner of the Insurance Company on the answers given by the assured to the questions in the form of personal statement. The Medical Examiner of the Insurance Company is also required by the Insurance Company to medically examine the assured and fill in the details required in the form. The assured were examined by Dr. The Medical Examiner of the Insurance Company is also required by the Insurance Company to medically examine the assured and fill in the details required in the form. The assured were examined by Dr. De Costa on July 24, 1956 and he filled in the forms on the information given by the assured on his own personal examination. Dr. De Costa examined Kamalabai, the deceased on July 24, 1956. In the personal statement also the assured has to give a declaration, material part of which is to the following effect : "I do hereby declare that the foregoing answers have been given by me after fully understanding the questions and the same are true in every particular and that I have not withheld any information and I do hereby agree that this declaration together with the proposal for assurance shall be the basis of the contract to be made between me and the Indian Mercantile Insurance Co. Limited." (emphasis supplied). 4. We shall come to the details of the answers given in the proposal form and the personal statement later. On this proposal the Indian Mercantile Insurance Company registered the proposal as No. 39944 dated July 15, 1956 and by its letter dated July 30, 1956 (Exh. D-8) accepted the said proposal and demanded an amount of Rs. 1,927-8-0 (Rs. 1,927.50 p.) as the first premium. The Insurance Company stated that the Company was prepared to issue a policy to the assured on the terms undernoted. It further states the plan acceptable to the Company, as proposed at ordinary rates and subject to usual female extra. In this letter, it was further stated that until the first premium in full was paid and accepted as such by the Company, no liability is attached to the Company which reserved a right to cancel the acceptance. It further states the plan acceptable to the Company, as proposed at ordinary rates and subject to usual female extra. In this letter, it was further stated that until the first premium in full was paid and accepted as such by the Company, no liability is attached to the Company which reserved a right to cancel the acceptance. There is also a further clause stating as under: "If between the date of your medical examination for insurance in this Company and receipt of the first premium at the Head Office or issue of this acceptance letter whichever is later, you suffer from any illness or injury or there is a change in your family history or occupation or if a proposal for assurance on your life is made to another life office or is declined or not accepted at ordinary rates and as proposed the assurance shall be void unless you intimate the same to us in writing to enable the Company to reapprove the proposal." 5. Thereafter the plaintiff paid in the Nagpur Office an amount of Rs. 1,927-8-0 on account of the first premium on August 3, 1956 and a provisional receipt bearing No. 13313 was issued by the Nagpur Branch Manager. This receipt refers to the acceptance letter No. 39944. The payment of this first premium was thereafter acknowledged by the Head Office at Bombay by its interim policy receipt dated August 4, 1956 which refers to proposal No. 39944 and Policy No. R-36348t Though an amount of Rs. 1,927-8-0 was paid by the plaintiff, the receipt was for Rs. 1,727-8-0 for 12 months from August 4, 1956. The said receipt also recites that "the acceptance of this premium places the Company on the risk covered by the insurance, provided the terms and conditions of the acceptance letter have been complied with; the policy is under preparation and will be forwarded in due course". Thus according to the plaintiff the risk for this assurance of Rs. 40,000 was in the first place covered as from July 30, 1956 when the proposal was accepted and in any case on August 3, 1956 when the first premium was paid at the Nagpur: Office and in any case on August 4, 1956 when the Bombay Office received the payment and conveyed to the assured that the risk was covered on the acceptance of the said premium. 6. 6. Out of the payment of Rs. 1,927-8-0 made by the plaintiff an amount of Rs. 200 remained in balance with the Insurance Company. According to the plaintiff, it was then proposed by his Insurance Agent that he may instead of withdrawing the amount of Rs. 200 from the Insurance Company as well increase the amount of insurance from Rs. 40,000 to Rs. 50,000 on payment of additional premium which would amount to Rs. 231-14-0. The plaintiff then made a request by his letter dated August 9, 1956 to the Branch Manager of the Insurance Company at Nagpur to increase the amount of Insurance from Rs. 40,000 to Rs. 50,000 and also paid the difference of Rs. 231-14-0 on which the Indian Mercantile Insurance Company issued a premium receipt on that date for the amount of Rs. 231-14-0 and made an endorsement on the top of the said receipt that it was difference due to the change of the sum assured from Rs. 40,000 to Rs 50,000. In this receipt the number of the policy has been given as 36348 in dated August 9, 1956. 7. The Indian -Mercantile Insurance Company then issued a letter (Exh. P-4, Exh. D-9) to the plaintiff and his wife on August 20, 1956 informing the assured that their proposal for assurance has been duly considered by the Company and that the Company was prepared to issue a policy to them on the terms noted thereunder. This letter purports to say that it was issued in lieu of the acceptance letter dated July 30, 1956. In this letter the proposal number has been given as 39944 dated July 15, 1956 and the sum proposed is shown to be. Rs. 50,000. This letter also shows that until the first premium in full was paid to and accepted as such by this Company, no liability attached to the Company which reserved the right to cancel this acceptance. It may be noted that by this time the full amount of the first premium on the sum of Rs. 40,000 had been paid by the assured on August 3, 1956 in the Nagpur Branch and was received by the Bombay Branch on August 4, 1956. It may be noted that by this time the full amount of the first premium on the sum of Rs. 40,000 had been paid by the assured on August 3, 1956 in the Nagpur Branch and was received by the Bombay Branch on August 4, 1956. As in the earlier letter of acceptance, this letter also states that if between the date of their medical examination for insurance in this Company and receipt of the first premium at the Head Office or issue of this acceptance letter whichever is later, they suffer from any illness or injury or there is a change in their family history or occupation or if a proposal for assurance on their life is made to another life office and is declined or not accepted at ordinary rates and as proposed the assurance shall be void unless they intimate the same to the Company in writing to enable the Company to re-approve the proposal. The Nagpur Branch office of the Indian Mercantile Insurance Company also wrote to the plaintiff and his wife on August 23, 1956 informing them that the head office has increased the sum assured from Rs. 40,000 to Rs. 50,000 and enclosed the interim policy receipt No. 36442 for the amount covering the risk on the life of the assured with effect from August 4, 1956 under the above policy for Rs. 50,000. It was stated that the policy was under preparation and the same would be forwarded to them shortly. This letter also makes a reference to the proposal No. 39914 and policy No. 36348 on the joint life (Exh. P-5). 8. The plaintiffs wife Kamalabai fell ill on September 2, 1956 and that was her last illness. She died on September 7, 1956 and the cause of her death was stated to be heart failure due to labour pneumonia of left lung. During her last illness between September 2 and 7, 1956 Dr. L. S. Kale was attending on her. By this time the formal insurance policy was not issued by the Company to the assured and it was issued by the Company on October 22, 1956 and received by the plaintiff thereafter. The Insurance Policy is Exh. P-16 and bears the Policy No. 36348-R and is for a sum of Rs. 50,000. L. S. Kale was attending on her. By this time the formal insurance policy was not issued by the Company to the assured and it was issued by the Company on October 22, 1956 and received by the plaintiff thereafter. The Insurance Policy is Exh. P-16 and bears the Policy No. 36348-R and is for a sum of Rs. 50,000. In this policy the risk date is given as August 4, 1956; the date of last payment is given as August 4, 1980 and the date of maturity is given as August 4, 1981. 9. On the death of anyone of the joint assured the amount of the policy was payable to the survivor. On the death of Kamalabai the plaintiff who was the survivor made a claim on the said policy to the Life Insurance Corporation of India, Unit Indian Mercantile Insurance Company as by that time the Life Insurance Corporation of India had taken all the life insurance business. It appears that the plaintiff had informed about the death of his wife by his letter dated October 25, 1956 and subsequently sent another letter on December 13, 1956 which was acknowledged by the defendant. by its letter dated December 29, 1956 (Exh. P-6). While acknowledging the letter, the defendant Corporation sent a set of claim forms which were to be completed by the plaintiff in order to enable the Corporation to consider the claim. These forms were then completed by the plaintiff by about February 4, 1957 and were sent to the defendant Corporation which acknowledged the receipt thereof by its letter dated February 13, 1957. There was then some correspondence between the plaintiff and the defendant by which the plaintiff was requesting the defendant Corporation to settle his claim early while the defendant Corporation was informing the plaintiff that it was investigating into the matter. Ultimately, by its letter dated August 13, 1958 (Exh. P-13), the Life Insurance Corporation of India repudiated all liability under the policy on account of the deceased having withheld correct information regarding her health at the time of effecting the assurance with the Unit Indian Mercantile Insurance Company. In this letter the defendant Corporation mentioned the questions which were answered incorrectly by the deceased in the personal statement made by her on July 24, 1956. Those questions were 4 (a), (d), 7, (b), (c), (j) and 10 (a) and (b). In this letter the defendant Corporation mentioned the questions which were answered incorrectly by the deceased in the personal statement made by her on July 24, 1956. Those questions were 4 (a), (d), 7, (b), (c), (j) and 10 (a) and (b). The defendant Corporation by this letter told the plaintiff that the answers given to these questions were incorrect and false and they held indisputable proof to show that sometime before the date of proposal she had suffered from Eosinophilis with extreme dyspnoea and dilated heart and mitral stenosis for all of which she had taken treatment from medical men and in a hospital and that an X-ray of her chest was taken which showed enlarged heart. It was also stated in this letter that between the date of proposal and the date of issue of the acceptance letter, she had suffered from diarrhoea and dysentry with nausea vomit for which she had taken treatment from medical men, but she did not disclose the same to the Indian Mercantile Insurance Company as she was bound to do in terms of the acceptance letter dated August 20, 1956. The letter also stated that during the said period a proposal to another Insurance Company on the joint lives of the plaintiff and his wife was accepted by that Company for a reduced sum assured and not as proposed, but the assured had not intimated this fact to the Indian Mercantile Insurance Company although they were bound to disclose it in terms of the acceptance letter referred to above. 10. On this repudiation by the defendant Corporation, the plaintiff served the defendant with a notice of suit dated August 11, 1959 and the defendant having failed to comply with that notice, the instant suit was filed by the plaintiff on September 7, 1959. 11. The plaintiff claimed that the proposal was accepted on July 30, 1956 when the acceptance letter was given by the Insurance Company and in any case on August 3, 1956 when the payment of the first premium was made. This insurance was for a sum of Rs. 40,000. The revised sum of Rs. 50,000 in place of Rs. 40,000 was only a modification of the original contract and was not a new contract in substitution of the old one for Rs. 40,000. The plaintiff claimed Rs. 59,000 from the defendant which included Rs. This insurance was for a sum of Rs. 40,000. The revised sum of Rs. 50,000 in place of Rs. 40,000 was only a modification of the original contract and was not a new contract in substitution of the old one for Rs. 40,000. The plaintiff claimed Rs. 59,000 from the defendant which included Rs. 50,000 as the sum assured and Rs. 9,000 as interest on Rs. 50,000 from September 8, 1956 to September 6, 1959 at 6 per cent. per annum. The plaintiff in the alternative had suggested in para. 12 of the plaint that in any case the defendant was liable to pay at least Rs. 40,000 to the plaintiff along with interest thereon. Though there is no such alternative specific prayer in the relief claimed by the plaintiff he has asked for any other relief which the Court deems fit. Accord. ing to the plaintiff there was no kind of misrepresentation or mis-statement or suppression of any facts much, less material facts and the defendant was not entitled to repudiate the contract. 12. The law with respect to insurance previously was that any mis-statement on the part of the assured while making the proposal or at any stage thereafter avoided the contract of policy and the insurer was not liable for the claim on such policy. In Condogianis v. G. Assurance Co., Ltd.,1 their Lordships pointed out that if in point of fact the answer is untrue, the warranty still holds, notwithstanding that the untruth might have arisen inadvertently and without any kind of fraud. Secondly, the materiality of the untruth is not in issue; the parties having settled for themselves-by making the fact the basis of contract and giving warranty - that as between them their agreement on that subject precluded all inquiry into the issue of materiality. A similar view has been taken in Lakshmishankar v. Gresham Life Assurance Society,2 where it has been held that where the representations, statements and agreements made by an assured in his application for a policy of life assurance are made a basic condition of contract by the policy of life insurance, the truth of the statements contained in the proposal are apart from the question of their materiality the condition precedent of the liability of the assurance company. It has further been held that some of the false answers in the form were filled in by the agent of the company will not make any difference, as it must be held that either the assured authorised these answers to be given or by his negligence he made it possible for the agent to deceive the company. In either case the company is absolved. 13. The Insurance Law, however, has undergone a material change. The Insurance Act, 1938 has been amended from time to time and section 45 of the Act, as amended by Act No. 13 of 1941, which is relevant for our purposes is to the following effect: "45. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose." We are not here concerned with the proviso to section 45. The section is divided into two parts. Under the first part, if the insurer calls in question the policy within a period of two years from the date on which it was effected, then the insurer company has only to show that a statement made in the proposal for insurance, or in any report of a medical officer, or referee, or friend of the insured, or in any other document, leading to the issue of the policy was inaccurate or false. Even an incorrect statement which may not be on a material fact and suppression of fact which may not be on a material point, would be enough for the insurer company to avoid the contract of policy under this part. Under the second part, where a period of two years expired after the date of policy was effected without any challenge to it by the insurer, the insurer could call it in question only on showing that such statement by the insured was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. The question as to the date on which the policy could be said to be effected and the date on which the proposal can be said to have been accepted assumes importance in this case as on the determination of this question will depend whether the repudiation by the insurer has been within two years or after a period of two years from the date on which the policy was effected. 14. According to the learned counsel for the plaintiff-appellant, the policy in this case was effected on July 30, 1956 when the proposal was accepted by the Insurance Company and in any case not later than August 4, 1956 when the payment of the first premium was received by the Companys Bombay Office. On the other hand, the learned counsel for the defendant-Corporation contends that the policy must be taken to have been effected on October 22, 1956 when the document of policy was issued by the Indian Mercantile Insurance Company Limited (Exh. P-16). We have been referred first to the words in section 45 itself which relate the word effected to the word policy. It is stated that the word policy used in section 45 means a document of policy issued formally as in Exh. P-16 and since such a policy in the present case has been issued on October 22, 1956 that must be taken to be the date on which the policy has been effected. It is stated that the word policy used in section 45 means a document of policy issued formally as in Exh. P-16 and since such a policy in the present case has been issued on October 22, 1956 that must be taken to be the date on which the policy has been effected. Secondly, we were referred to section 66, sub-section (b) of the Stamp Act which uses the words "makes, executes or delivers out any policy which is not duly stamped". We are unable to read in section 45 of the Insurance Act that the word "effected" means the date on which a formal policy in cold print is issued. In order to make a contract, there is a proposal and an acceptance. As soon as the proposal is accepted by the other contracting party, the contract is complete and that is the basis of the right of one party and the liability of the other. The liability does not for the first time arise on the formal document of policy. It is only a formal expression of a contract which has already taken place. The date, therefore, material is the date of the acceptance and it is from that date that the rights and liabilities will accrue. Whenever a formal policy is made it has to be duly stamped in accordance with the provisions of the Stamp Act then prevailing and section 66 of the Stamp Act makes the act of not duly stamping the policy punishable. That does not, however, mean that the policy becomes effective only from the date the formal document is executed or issued. In our opinion; the phraseology used in section 45 of the Insurance Act relates to a date from which the policy of insurance, that is, a contract of insurance, becomes effective and such date would be the" date of the acceptance of the proposal from which the risk on the life of the proposer is covered. 15. We were referred to Life Insurance Corporation of India v. Bibi Padmawati.8 In this case two life insurance policies were taken, one on September 8, 1944 and the other on November 12, 1944. The first policy lapsed in March 1947 and the second in May 1947. The insured applied for revival of these policies in November 1948 and they were revived sometime thereafter. The insured died in April 1949. The first policy lapsed in March 1947 and the second in May 1947. The insured applied for revival of these policies in November 1948 and they were revived sometime thereafter. The insured died in April 1949. The question arose whether the policies could be avoided under the first part of section 45 or only under the second part. It is not clear from the judgment as to whether the dates on which the policies were taken related to the dates of the acceptance of the proposal, that is, the dates from which the risks on the life of the insured were covered or whether they represented the dates of the formal documents of policies. Even if those dates could be taken to be the dates of the fO,rma1 documents of policies, it would always be subsequent to the date of the acceptance or the coverage of the risk. There was no repudiation till the death of the insured which occurred more than two years after the aforesaid dates. The question, therefore, as to when the policies can be said to have been effected within the meaning of section 45 of the Insurance Act was not for consideration in the said case. 16. Surajmull v. Triton Insurance Co.4 was a case of marine insurance and under the Indian Stamp Act No. II of 1899, section 7 provided that no contract for sea-insurance shall be valid unless the same is expressed in a seapolicy. On the law then applicable to marine insurance, their Lordships held that no Court can enforce as valid that which competent enactment have declared shall not be valid. This decision has thus no application. 17. Reliance was then placed on Mithoolal v. Life Insurance Corpn. of India. 5 In this case the document of policy was issued on March 13, 1945 and it was to come into effect from January 15, 1945. The claim was repudiated by the insurer by letter dated October 10, 1947 and from these facts it was expressed that the two years had expired from the date on which the policy was effected. It will be seen that the date of this repudiation by the insurer is more than two years after March 13, 1945 when the policy was issued as well as January 15, 1945 when the policy came into effect. It will be seen that the date of this repudiation by the insurer is more than two years after March 13, 1945 when the policy was issued as well as January 15, 1945 when the policy came into effect. There is no decision in this case as to when the policy can be said to have been effected. This decision, therefore, is also of not much help in the present case. 18. It may be noted that in the instant case by its letter dated July 30, 1956 the insurer conveyed to the insured that the proposal has been accepted. This letter further stated that until the first premium was paid and accepted as such by the company no liability attaches to the Company which reserves the right to cancel the acceptance. The first premium is paid on August 3, 1956 at the Nagpur Office and received by the Bombay Office on August 4, 1956. Then there is a letter from the insurer dated August 4, 1956 (Exh. D-5) which is styled as interim policy receipt which acknowledges the payment of the first premium and it says that the acceptance of this premium places the company on the risk covered by the insurance. Both the terms and conditions of the acceptance letter have been complied with. This has reference to the letter dated July 30, 1956. This receipt also gives the policy No. as R-36348. It would thus be seen that the risk on the life of the insured has been covered as from August 4, 1956 and it was irrespective of a formal document of policy. If after the date of the acceptance and before the issue of a formal, document of policy, death of the insured had occurred, the insurer-company was certainly liable for the claim of insurance and it would have been no answer to say that a formal document of policy had not been issued by that time. This would, therefore, show that the policy, that is, the contract of insurance between the parties has become effective since the date of the acceptance of the proposal from which date the risk is covered. It is in this sense that the words "policy of life insurance effected" have been used in section 45 of the Insurance Act. This would, therefore, show that the policy, that is, the contract of insurance between the parties has become effective since the date of the acceptance of the proposal from which date the risk is covered. It is in this sense that the words "policy of life insurance effected" have been used in section 45 of the Insurance Act. Even the formal policy issued in this case also refers to the date August 4, 1956 from which the risk of insurance is covered. The policy further mentions the date of last payment as August 4, 1980 and the date of maturity as August 4, 1981. It further gives the same number of the policy as was given in the letter dated August 4, 1956 which would show that the policy became effective or, in other words, the policy was effected on August 4, 1956. We have, therefore, no hesitation in holding that the policy must be taken to have been effected on August 4, 1956 under the original proposal for Rs. 40,000. 19. If that is taken to be the date on which the policy can be said to have been effected, then the repudiation of the claim which is by the defendants letter dated August 13, 1958 is clearly beyond a period of two years from that date and the defendant-Corporation will have to establish the matters mentioned in the second part of section 45 of the Insurance Act. It is, however, contended by the defendant-Corporation that the policy if not taken to have been effected on October 22, 1956, must in any case be taken to have been effected on August 23, 1956 when the proposal to increase the insurance amount from Rs. 40,000 to Rs. 50,000 was finally accepted by the company: The contention is that the contract which was earlier entered into for a sum or Rs. 40,000 was substituted by a new contract for the amount of Rs. 50,000 and it was the new contract only which was capable of enforcement rescinding the earlier contract and it is the date of acceptance of such contract that must be taken into consideration. In other words, the defendants case is that there has been a novation of contract and the latter contract has taken place of the former contract. 50,000 and it was the new contract only which was capable of enforcement rescinding the earlier contract and it is the date of acceptance of such contract that must be taken into consideration. In other words, the defendants case is that there has been a novation of contract and the latter contract has taken place of the former contract. On this reasoning the repudiation is within two years of the policy or contract and, as such, the defendant could repudiate its liability only by showing under the first part of section 45 that the statements made in the proposal and in the related documents were inaccurate or incorrect or untrue without showing anything more. 20. In this connection, it has to be noted that the original proposal for Rs. 40,000 having been accepted latest by August 4, 1956, that contract was complete and all the necessary formalities that were required to be gone into while making the proposal and before its acceptance were gone into, that is, the insured had submitted duly filled in proposal forms, bad submitted to the medical examination by the insurers medical examiners, had given their personal statements before the medical examiners and were also medically examined and thereafter their proposals were accepted. This contract, therefore, was complete and was, at no time, expressly cancelled. That contract had already become operative from August 4, 1956. However, by letter dated August 9, 1956 the insured requested the insurer to increase the amount of insurance from Rs. 40,000 to Rs. 50,000. For this increase there were no fresh proposals, no fresh personal statements and no fresh medical examination. It was on the basis of the old proposals and, the statements made along with them and the medical examination at that time that only on the payment of the difference in the first premium the insurance for the sum of Rs. 50,000 in lieu of Rs. 40,000 was accepted. Even though the amount was increased to Rs. 50,000 the risk was still covered for this whole amount as from August 4, 1956 as was originally done in respect of the insurance for Rs. 40,000. That would be clear from the letter of the Insurance Company dated August 23, 1956 as well as the formal policy dated October 22, 1956. It cannot be said that this coverage for Rs. 10,000 more was altogether a new contract. 40,000. That would be clear from the letter of the Insurance Company dated August 23, 1956 as well as the formal policy dated October 22, 1956. It cannot be said that this coverage for Rs. 10,000 more was altogether a new contract. It was simply a modification of the old contract without altering its material terms and without being inconsistent with the same. Such a contract, therefore, cannot be said to be a novation or new contract in substitution of the old contract so as to make the old contract absolutely ineffective and making effective only the new contract. 21. The Calcutta High Court in Juggilal v. N. V. Internationale Crediet-En-Handrds,6 has stated that mere alteration or modification of the terms of a contract do not amount to its rescission. The Court further stated that the modifications are read into and become part and parcel of the original contract and the original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications. Similar view has been taken in Vishram Arjun v. I. Shankariah,7 in which while considering the terms of the original contract and the subsequent agreement, their Lordships stated that the subsequent agreement only related to some other terms and was not a self contained agreement in relation to the original contract of sale and that the subsequent agreement did not constitute a novation but was substantially an agreement of remission. They further stated that in fact both these two agreements put together formed one complete subsisting contract. They observed that novation is a substitution of a contract and not a mere variation of some of its terms. They further observed that the new contract should rescind or extinguish the previous contract, and a new and independent agreement concerning the same matter as the previous agreement may be construed to discharge the former only if the terms of the latter are so inconsistent with those of the former that they cannot stand together. They further observed that the new contract should rescind or extinguish the previous contract, and a new and independent agreement concerning the same matter as the previous agreement may be construed to discharge the former only if the terms of the latter are so inconsistent with those of the former that they cannot stand together. They further observed that in other words, a contract will be said to be rescinded by another between the same parties when the latter is inconsistent and renders impossible the performance of the former and if their legal effect is the same, though they differ in terms, even then it will be a mere ratification of the first and they must be construed together. In the instant case, there is nothing inconsistent between the first contract and the second agreement. No material terms have been altered. There is only a modification with respect to the amount of insurance, everything else remaining the same. In fact, there is no fresh proposal which is a foundation of a contract, nor any further statements or medical examination in respect of the subsequent agreement were there and it is on the basis of the first proposal itself that the increase in the amount is accepted. The second agreement for the increase in the amount must, therefore, be read into the original contract itself which was accepted on August 4, 1956. In any case, the earlier Contract which came into effect from August 4, 1956 was not rescinded or obliterated and remained effective as from August 4, 1956. Even with respect· to the increased amount, the additional amount of the first premium was paid on August 9, 1956 and as such, in any case, the policy for Rs. 50,000 would become effective from August 9, 1956 and even from that date, the repudiation is after the period of two years. 22. The learned counsel for the defendant-Corporation, however, contended that this new contract was wholly in substitution of the old one and this was the only effective contract which could be in force. For this purpose, a strong reliance has been placed on the companys letter dated August 20, 1956 (Exh. P-4) which mentions that it has been issued in lieu of acceptance letter dated July 30, 1956. For this purpose, a strong reliance has been placed on the companys letter dated August 20, 1956 (Exh. P-4) which mentions that it has been issued in lieu of acceptance letter dated July 30, 1956. From this it is sought to be inferred that the earlier acceptance dated July 30, 1956 has been cancelled by this letter and the only acceptance is on August 20, 1956. It bas, however, to be noted that this has also a reference to the original proposal No. 39944, dated July 15, 1956 and it will be further clear from the letter dated August 23, 1956 (Exh. 5) that it was only the original contract which was simply modified by increasing the amount of the insurance. This letter (Exh. P-5) refers to the same old proposal No. 39944 and the same Policy No. 36348 and further states that the risk on the life of the insured has been covered with effect from August 4, 1956 which was also the date under the old contract. The contention, therefore, cannot be accepted that the policy became effective only from August 20, 1956 and not from an earlier date. According to us, the policy became effective even with respect to the amount of Rs. 50,000 from August 4, 1956 and the repudiation by letter dated August 13, 1958 being after the period of two years from the date on which the policy has been effected, the matter will fall under the second part of section 45 of the Insurance Act. The insurance company will have to show that the statement made by the insured in the proposal and the other documents leading to the issue of the policy was not only inaccurate or false, but such statement was on a material matter and that the policy holder knew at the time of making it that the statement was false or that the insurer will have to show that the insured suppressed facts which it was material to disclose and that the policy holder knew at the time of making it that it suppressed facts which it was material to disclose. 23. The policy in the instant case was a joint policy, that is, on the joint lives of the plaintiff and his wife, deceased Kamalabai. 23. The policy in the instant case was a joint policy, that is, on the joint lives of the plaintiff and his wife, deceased Kamalabai. In such a joint policy, a false statement by anyone of the joint proposers is sufficient to avoid the policy, as has been held in Waman v. Western India Life Assurance Co.8 It was pointed out in that case that the declaration made by the assured was false and there was a wilful suppression of true facts. It was held that the case was one of joint and several liability, in which it was sufficient to defeat the claim on facts which make the policy of anyone of the assured void and unenforceable. It was further held that the question of appellants own knowledge regarding the truth or otherwise of the statement made by the assured who was dead was not, therefore, material. It will, therefore, be enough if the defendant were to show that the insured made an inaccurate or false statement on a material matter and that it was fraudulently made and that he knew at the time of making it that the statement was false or that the policy holder suppressed facts which it was material to disclose and he knew at the time of making it that he suppressed facts which it was material to disclose. It has, therefore, to be seen whether the defendant in this case has succeeded in proving the aforesaid requirements of section 45 of the Insurance Act. 24. What constitutes ‘a material fact under section 45 of the Insurance Act has been considered in several decisions. What facts are material is a question of fact in each case. The Sind Judicial Commissioners Court in Shivkumar v. N. B. and M. Insurance Co.,9 has laid down a test which, to our mind, is a correct test that all such facts which would influence a reasonable man either to accept or to decline the risk or to stipulate for a higher premium would be material. The Insurance Companies have devised several forms. One of them is the proposal form, the other is the personal statement of the proposer which is recorded by a medical examiner on the basis of the answers given by the proposer to questions mentioned in the form and put by the medical examiner to the proposer. The Insurance Companies have devised several forms. One of them is the proposal form, the other is the personal statement of the proposer which is recorded by a medical examiner on the basis of the answers given by the proposer to questions mentioned in the form and put by the medical examiner to the proposer. It is on the basis of these statements that the insurer considers the proposal and that forms the basis of the contract. In fact, in the forms it has been made specifically clear that the statements made by the proposer would be the basis of the contract. It is, therefore, of utmost importance that these statements made by the proposer must be true and there should not be suppression of any material fact. In the prescribed forms there are several questions which have a material bearing on the matter of acceptance of the proposal. On the basis of the truthfulness of those statements, the insurer may· be persuaded to accept the proposal of the insured. If, however, the facts were otherwise, the insurer might have declined to accept the proposal or would have agreed to accept the same in a modified form either for a lesser amount or for an extra premium. Some of the statements may not be as important as others. Some statements may not have the effect of influencing the judgment of the insurer while accepting the policy, whereas the other statements may have an important bearing inasmuch as those statements would influence the decision of the insurer one way or the other. It is from this point of view, that it has to be seen whether the insurer has shown that the insured has made inaccurate or false statements on material matters. If this is established, then it must be further shown that the policy holder must have known at the time of making the statement that it was false. The latter requirement could be inferred from the circumstances brought out on record. Similar would be the case regarding the suppression of facts which it was material to disclose. 25. If this is established, then it must be further shown that the policy holder must have known at the time of making the statement that it was false. The latter requirement could be inferred from the circumstances brought out on record. Similar would be the case regarding the suppression of facts which it was material to disclose. 25. In an insurance matter the age of the insured and the state of his health at the time of the proposal and prior to it are of prime importance because it is on the basis of this that the insurer may consider whether it should accept the proposal and if so, on what terms. It is with this view that the forms have been devised and detailed information as to the state of health of the insured at the date of the proposal and in the past is required with minute details. Not only that, but an obligation is also cast on the insured to inform the insurer if he is affected by any disease or ailment between the date of the proposal and the acceptance of the insurance. In the case of a woman, special care is taken as the insurance on the life of a woman is considered to be a hazard. A person suffering from serious disorder or having continued illness for prolonged periods may not be taken to be a sound case for insurance. It cannot, however, be said that no person should ever fall ill. Mostly every person during his life span has some ailments or the other; some may be of minor type, others may be of major type. Minor ailments or ailments of a passing nature may not affect the life expectation of a person; whereas major illness in the life of a man or some dangerous ailments or serious disorders may affect the expectation of his life. A person who has suffered only from minor ailments or short or ordinary illnesses, may not be considered to be a rejectable case for insurance. The state of health, therefore, is not always a material fact, but may become a material fact if on that depends the decision of· the insurer. A man may suffer from the ordinary passing ailments like cough and cold or ordinary fever for a short period, or a casual headache or bodily pain. The state of health, therefore, is not always a material fact, but may become a material fact if on that depends the decision of· the insurer. A man may suffer from the ordinary passing ailments like cough and cold or ordinary fever for a short period, or a casual headache or bodily pain. That would not, however, affect the general health of the person and such a case would be favourably considered for insurance by the insurer. These, therefore, could not be called the material matters and if there is any suppression with respect to such minor ailments or an inaccurate or false statement on such matters, that would not necessarily vitiate the contract. We may refer for this purpose to the decision in Janaki v. Kalliani Amma,10 Lakshmi Ins. Co. v. Bibi Pudmawati,11 which was affirmed by the Supreme Court in Life Insurance Corporation of India v. Bibi Padmawati. 26. The above principles have been laid down by several decisions of the different High Courts and the Supreme Court and we may mention a few of them. They are: Seethamma v. Bombay Life Assrn. Co.,12 V. k. Srinivasa v. M/s. P. L. and G. I. Co.,13 Benarasi Debi v. New India Assurance Co.,14 Ratan Lal v. Metropolitan Insurance Co.,15 New India Assurance Co. v. T. S. Raghavareddi,16 Lakshmi Ins. Co. v. Bibi Padmawati and Mithoolal v. Life Insurance Corpn of India. In the Supreme Court case, last mentioned, their Lordships have summarised the three conditions for the application of the second part of section 45 of the Insurance Act. They are: (a) the statement must be on a material matter or must suppress facts which it was material to disclose, (b) the suppression must be fraudulently made by the policy holder and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. We have, therefore, to see whether in the instant case these three conditions have been fulfilled. [His Lordships after considering the evidence in the case proceeded.] From the discussion of this evidence, the following facts emerge: (a) The deceased Kamalabai had conceived not less than 6 times. We have, therefore, to see whether in the instant case these three conditions have been fulfilled. [His Lordships after considering the evidence in the case proceeded.] From the discussion of this evidence, the following facts emerge: (a) The deceased Kamalabai had conceived not less than 6 times. At the time of making the proposal she had two children living, two had died and one was still-born and she had conceived at the date of making of the proposal and subsequently, there was an abortion of 2 months. (b) She had always been ailing and was taking medical treatment of Dr. Deo, Dr. Sahu and in the hospitals, such as Daga Memorial Hospital. (c) At least two of her deliveries were not normal, that is, the still-born delivery and the abortion. (d) The deceased has taken treatment of Dr. Deo for eosinophilia and asthma and at that time she was also having extreme breathlessness pointing to either serious type of eosinophilia or asthma or some cardiac heart trouble. (e) She had also heart disease for which she was admitted in the Dap Memorial Hospital and was treated there for about one month and a quarter. She was treated there for mitral stenosis. (f) She was treated by Dr. Deo only for two days during which time she was suffering from dyspnoea and either eosinophilia or asthma and was thereafter admitted to the Daga Memorial Hospital which shows that the disease from which she was suffering was not an ordinary one but required careful treatment in a hospital. (g) From the fact that Dr. Deo did not continue the treatment and she was immediately thereafter admitted to the Daga Memorial Hospital where she was treated for a month and a quarter must have made her aware that she was suffering from a serious disorder. She must have also been aware that she was suffering from some heart disease giving rise to breathlessness. 27. Now all these facts which have been established in the evidence of the defendant were material facts which it was necessary for the insured to state correctly and truly in the proposal or in the personal statement and to disclose them fully in those documents. The plaintiff and tile deceased must have full knowledge about the number of conceptions the deceased had. The plaintiff and tile deceased must have full knowledge about the number of conceptions the deceased had. They must have had knowledge about the Children born to them and how many were living and how many were dead. They must have also knowledge about the birth of a still-born child and the abortion. Since the deceased Kamalabai was taking treatment from one doctor to another and had also got her X-rayed, though X. ray photograph has not been produced, they must have enquired arid come to know about the real ailment of Kamalabai. In any case, the plaintiff must have known about the ailment for which Kamalabai "as being treated from place to place. The plaintiff and the deceased had knowledge that during the period of five years prior to the date of proposal Kamalabai was being medically attended to by medical practitioners. These were the matters within the knowledge of the insured and related to the material facts. It was for them to have disclosed these facts in the statements they made in the documents leading to the policy when there were specific questions relating to the matter and they had only to answer the questions correctly. Instead of disclosing all these matters, the plaintiff and the deceased suppressed these facts at the time of the proposal and thereafter and denied about any illnesses or about any medical treatment etc. and with respect to children even made false statements which were false to their knowledge. In fact, at the earlier proposal they gave one information while at the proposal in question they gave a different information. These facts, therefore, would show that the plaintiff and his wife, the insured, made either false statements on material matters or suppressed facts which it was material to disclose. They also knew at the time of making of this statement that it was false and for that they were suppressing facts which it was material to disclose. It is reasonable to draw an inference that the insured must have done this with a view to get their proposal accepted by the Indian Mercantile Insurance Company. Otherwise there is no reason why the statement made in the forms supplied to the Ruby General Insurance Company and the Indian Mercantile Insurance Company should materially differ. It is reasonable to draw an inference that the insured must have done this with a view to get their proposal accepted by the Indian Mercantile Insurance Company. Otherwise there is no reason why the statement made in the forms supplied to the Ruby General Insurance Company and the Indian Mercantile Insurance Company should materially differ. A reasonable inference, therefore, can be drawn that such a false statement or the suppression of the material facts was fraudulently made by the policy holders in order to gain an unfair advantage. The defendant has, therefore, shown from the evidence on record, Goth oral and documentary as well as the attending circumstances, that the plaintiff and his wife made false statements on material matters and suppressed facts which it was material to disclose. The defendant has also shown that the plaintiff and his wife must have known at the time of making the statements that they were false of that they suppressed facts which it was material to disclose. The defendant has also shown that the suppression was fraudulently made by the plaintiff and his wife. 28. From all the evidence and the circumstances it will not be unreasonable to infer that seeing that Kamalabai was suffering from the serious disorders and keeping indifferent health throughout and expectation of her life was not much, the plaintiff was making frantic efforts to get an insurance for an exorbitant amount so that on her death he would get a fabulous amount on payment of a comparably small sum. It appears that the plaintiff must not have had much hope of the survival of his wife for a sufficiently long time. It is with that view that he first wanted to insure their joint lives for an amount of Rs. 30,000 with Ruby General Insurance Company and if we accept the case of the plaintiff that he was not aware of the counter offer of the Ruby General Insurance Company for a reduced sum of Rs. 10,000 which he ultimately refused, then this insurance with the Indian Mercantile Insurance Company for Rs. 50,000 would have taken the total insurance of Rs. 80,000. The total yearly premium on these two policies would have been near about Rs. 4,450, that is, about 375 per month which certainly the plaintiff could not be in a position to pay as in Exh. 50,000 would have taken the total insurance of Rs. 80,000. The total yearly premium on these two policies would have been near about Rs. 4,450, that is, about 375 per month which certainly the plaintiff could not be in a position to pay as in Exh. P-17 he has stated that his monthly income was Rs. 400 to Rs. 450. This was in reply to the letter of the Ruby General Insurance Company dated May 17, 1956 and the reply was on May 19, 1956. Even assuming that the present policy would be the only policy, even then the monthly premium would come to about Rs. 180 per month. 29. The plaintiff has examined himself and Dr. Kale who has in fact supported the case of the defendant. The plaintiff in his evidence has simply denied about the alleged ailments and treatment of Kamalabai. He denied that Kamalabai had ever any abortion which stands falsified by the evidence of Dr. Sahu. He admits that Kamalabai had given birth to a still-born female child which admittedly was not shown at the time of the proposal. Even in his deposition he contradicts the statement which was made in the proposal to the Ruby General Insurance Company with respect to the birth of children. He has also stated in his evidence that Kamalabai had conceived only three times which cannot be correct as shown already. He had even denied that Kamalabai was ever treated by Dr. Deo which statement appears to us to be false and. incorrect. From the evidence of Dr. Deo and the documents he has produced, it is quite apparent that Kamalabai was being treated by Dr. Deo from time to time. The plaintiff, therefore, has not been able to rebut the evidence which has been given on behalf of the defendant. We, therefore, accept the evidence tendered on behalf of the defendant and hold that the plaintiff and his wife had deliberately suppressed material facts which they ought to have disclosed and of which they had knowledge and that they have made inaccurate and false statements knowing that they were false and such statements were made by them fraudulently with a view to have their proposals accepted. On this evidence, we hold that the contract of insurance entered into with the Indian Mercantile Insurance Company is vitiated and not binding on the defendant. On this evidence, we hold that the contract of insurance entered into with the Indian Mercantile Insurance Company is vitiated and not binding on the defendant. The policy in suit on which the plaintiff bases his claim is, therefore, void and the plain tiff is not entitled to make any claim on the basis of the aforesaid policy. The plaintiff, therefore, was not entitled to any decree whatsoever. The plaintiffs suit, therefore, was rightly dismissed by the trial Court. We see no reason to interfere with the decision of the trial Court. 30. Accordingly, the appeal fails and is dismissed with costs. Appeal dismissed.