AMENDMENT OF LEASE TERMS BY COMPROMISE DECREE DOES NOT CONSTITUTE NOVATION UNDER SECTION 62.

The plaintiffs (respondents) filed a suit for eviction against the defendants (appellants) on the grounds of expiry of a lease deed executed in 1994 by efflux of time.

The Trial Court and the First Appellate Court passed concurrent judgments and decrees for eviction.

The appellants challenged these findings in a second appeal, contending that a subsequent solenama (compromise) decree in 1996 constituted a "novation" of the 1994 lease under Section 62 of the Indian Contract Act, thereby rendering the original lease inoperative.

They further claimed rights of renewal and argued that the decree was inexecutable due to a lack of property segregation.

1. Whether the solenama decree of 1996 constituted a novation of the 1994 lease deed under Section 62 of the Indian Contract Act, 1872.

2. Whether the appellants had a unilateral right to renewal of the lease based on the terms of the compromise.

3. Whether the eviction decree was bad in law for failing to segregate the leased property from the defendants' additional property.

Section 62 of the Indian Contract Act, 1872, which provides that a contract need not be performed if the parties agree to substitute it with a new contract (novation), or to rescind or alter it.

Order XLI Rule 11 of the Code of Civil Procedure (CPC), regarding the admission and summary dismissal of second appeals.

The principle of lease expiration by efflux of time.

The principle that new factual or technical objections, such as property segregation, cannot be raised for the first time in an appeal if not categorically pleaded in lower courts.

The Court rejected the novation argument, finding that the 1996 solenama decree repeatedly referred to its terms as "amendments" to the original 1994 lease and maintained the original tenure, meaning it was an alteration rather than a new contract.

Regarding Section 62, the Court held it could not be invoked to discharge the original lease.

On the issue of property segregation, the Court noted that this defense was not raised in lower courts and was thus barred.

Substantively, the Court found no confusion was possible because the appellants remained owners of the additional property, and the suit was strictly restricted to the let-out property belonging to the plaintiffs.

The Court observed that the renewal clause in both the 1994 lease and the solenama decree was conditional upon the lessor's consent (sine qua non), granting no unilateral right to the appellants to extend the lease term.

The Court answered all issues in the negative, holding that (i) there was no novation, (ii) renewal was not a matter of right, and (iii) the decree was executable as the property identification was clear.

The appeal (SAT 109 of 2026) and the stay application (CAN 1 of 2026) were dismissed under Order XLI Rule 11 of the CPC.