ALAGIRISWAMI J.

The suit, out of which the present appeal arises, was filed by the respondent for recovery of a sum of Rs. 12, 500 due on an insurance policy taken by her husband, Sundaresa Iyer, on 2nd February, 1954. Sundaresa Iyer died on 18th August, 1955. The appellant-Corporation, which became a successor in interest of the insurance company with which the respondent's husband had insured his life, finally repudiated its liability on 10th August, 1959. The suit claim was in the alternative for a sum of Rs. 1, 865-10-0 being the premium paid by the respondent's husband. The appellant Corporation contended that the answers given by the insured to various questions in the proposal and the personal statement were false and false to his knowledge and that the deceased having died within two years of the policy taking effect, it was open to the insurer to repudiate the policy under section 45 of the Insurance Act, 1938, irrespective of the fact whether the answers contained in the proposals and the personal statement are material or not and that in any case, the deliberate suppression by the deceased about his illness, a material fact, would invalidate the policy. The trial court held that the answers given by the deceased did not relate to material facts and that therefore, it was not open to the appellant-Corporation to avoid the policy. In this court also, it was argued on behalf of the appellant that as the insured died within a period of two years of the policy taking effect, it was open to the insurer to repudiate the policy under section 45 of the Insurance Act. This contention is clearly unsustainable. Section 45 of the Insurance Act reads as follows

"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 ......" *

It would be seen that what is relevant under the section is that if a period of two years had expired from the date on which the policy of life insurance was effected, that policy cannot 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 a friend of the insured, or in any other document, leading to the issue of the policy, was inaccurate or false. A policy can be called in question within a period of two years from the date on which it was effected on the ground that any statement leading to the issue of the policy was inaccurate or false, but if the policy is questioned after a period of two years, the insurer can repudiate that policy only if he shows that such a statement was on a material matter or the insured 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. In this case two years had expired from the date on which the policy was effected, by the time the appellant Corporation repudiated the claim. We are clearly of opinion, that it is the latter part of section 45 of the Insurance Act that applies to the present case in view of the clear terms of the section.