The main legal point established in the judgment is the application of S.20 of the Contract Act to determine the voidability of contracts due to mutual mistake of fact, and the duty of disclosure in insurance contracts.

1. This appeal was once heard and disposed of by judgment dated 1.10.1990. But later on a petition was filed stating that the respondent-plaintiff died on 28.2.1990 and praying that the appeal be re-heard, after impleading his legal representatives. That petition was allowed.

2. The additional 2nd defendant in O.S. 78 of 1973 of the Sub Court, Kottayam is the appellant. The 1st defendant-company amalgamated with 2nd defendant-company. The Cross Objection relates to refusal of interest from the date of notice till date of decree.

2A. Plaintiff who is the proprietor of Padinjarekkara Bankers Kottayam is a financier. He had entered into hire purchase agreement with regard to vehicles sold by Kulathunkal Motor Corporation (for short the Corporation), sole distributors of Tata Diesel vehicles in Kerala. Whenever the purchasers wanted hire purchase facility, they were introduced to the plaintiff by the Corporation. The Corporation introduced me buyers of the vehicles and also produced the necessary registration certificates for entering into hire purchase agreement. After collecting premium and other amounts, the plaintiff had made declarations to the defendant-company for the purpose of taking policy covering the risk and paid the premium in respect of 27 vehicles. When one of the hirer defaulted payment, plaintiff proceeded against him and seized the vehicle. Someone else came with a claim and it was found out that the vehicle seized belonged to the third party and the registration certificate produced was false. Plaintiff applied to the R.T.O. for copies of registration certificates of all the 27 vehicles and ail of them turned out to the bogus ones. There was a criminal complaint pursuant to which police registered a case against the partner of the Corporation for cheating and evidence shows that he was convicted by court and the conviction was upheld by the apex court. Plaintiff has filed the suit for return of the premium amount paid to the defendants on the ground that the insurance contracts were void because the vehicles did not exist. The suit claim was Rs. 47,460/- with interest.

3. Defendant took up the position that the policies were issued on the basis of declarations submitted by plaintiff in utmost good faith, without enquiring into the truth or otherwise of the same. Therefore, it was contended that being uberrimae fidei contracts, the plaintiff ought to have known the facts and disclosed the same to the insurance company and as he had violated the good faith reposed in him, it is riot liable to return the amount. It was further contended that even if the plaintiff was misled by the Corporation, he could have discovered the truth and therefore, the mistake was unilateral on the part of the insurance company and there is no mutual mistake of fact and the contracts would not be void. It was also pleaded that the claim is barred by limitation.

4. Exts. A1 to A243 and B1 to B27 were marked. PWs.1 to 4 were examined. The trial court held that there was mistake of fact committed by both parties and the contracts were void under S.20 of the Contract Act and therefore, the defendant is liable to return the money paid by plaintiff towards premium. It further held that the fraud was discovered only on 19.10.1970 and the suit instituted in April, 1973 is within time. Hence the appeal.

5. Heard counsel.

6. The two points that arise for consideration are: 1) whether the insurance contract entered into between the plaintiff and the defendant is void on the ground of mutual mistake or fraud; and 2) whether the claim is barred by limitation.

7. Point No. 1:- It is unnecessary to refer in detail the facts because there is little dispute regarding the same. I shall state the brief facts. The procedure adopted was plaintiff used to finance purchasing diesel vehicles from the Corporation and purchasers would be introduced to the plaintiff by the Corporation. They would produce invoice containing a statement that the vehicle has be