1. Whether any mis-statement in the proposal form for obtaining life insurance policy automatically exonerates the Life Insurance Corporation of India (the first defendant) from liability to honour the policy claim is the question of law that falls for consideration in this appeal.

2. The first plaintiff is the wife of late Krapa Madhava Rao, insured in this case. He died intestate on 20.09.1982. The plaintiffs 2 and 3 are his sons. The second defendant was the mother of Madhava Rao. She died during the pendency of the suit. Consequently, defendants 3 to 5 were brought on record as the legal representatives of the deceased-second defendant. The third defendant died during the pendency of the appeal.

3. When Madhava Rao died, the first plaintiff, who is the nominee of the policy, claimed the sum insured at Rs.50,000/-. The first defendant declined to pay on the ground that Madhava Rao suppressed material information and that the policy consequently has become void. As the first defendant refused to honour the policy, the plaintiffs preferred the claim for the policy amount of Rs.50,000/-. The plaintiffs indeed claimed that Rs.37,500/- be paid to the plaintiffs 1 to 3 put t