Effect of novation, rescission, and alteration of contract
Section 62 of the Indian Contract Act, 1872 deals with effect of novation, rescission, and alteration of contract. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed. The Act came into force on 01 Sep 1872.
If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed.
Illustrations
(a) A owes money to B under a contract. It is agreed between A, B and C, that B shall thenceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a new debt from C to B has been contracted.
(b) A owes B 10,000 rupees. A enters into an arrangement with B, and gives B a mortgage of his (A's) estate for 5,000 rupees in place of the debt of 10,000 rupees. This is a new contract and extinguishes the old.
(c) A owes B 1,000 rupees under a contract. B owes C 1,000 rupees, B orders A to credit C with 1,000 rupees in his books, but C does not assent to the arrangement. B still owes C 1,000 rupees, and no new contract has been entered into.
Section 62, The Indian Contract Act, 1872 (Act 9 of 1872).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Sanjiv Prakash v. Seema Kukreja
Court's Decision & Legal Precedent
Judgement of Main Case order-7.pdf 2021-04-06. CA 975/2021 ALLOWED. Nariman. DATE-CHECK flagged 1971 company / 1997 name-change dates (false positive); body is the named reportable. Whether a shareholders' agreement novates a family MoU under Contract Act s.62 is a complex question for the arbitral tribunal, not an open-and-shut s.11 court finding (Kishorilal Gupta cited). Sibling SCIN010030392021 CA 976 order-7.pdf is a pronouncement ROP — do not use. Map s.62 only; do not pad Arbitration Act 11 (already filled).
On this section: Whether an SHA novates a family MoU under s.62 is a complex question for the arbitral tribunal, not an open-and-shut s.11 finding (Sanjiv Prakash).
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Satya Pal Anand vs State of M. P.
Court's Decision & Legal Precedent
When a party has resorted to multiple proceedings for the same relief and has an alternative and efficacious statutory remedy available and pending, the High Court in exercise of its discretionary writ jurisdiction under Article 226 of the Constitution is justified in declining to interfere. The remedy of writ is extraordinary and equitable, and the High Court cannot be oblivious to the conduct of the party invoking that remedy. Furthermore, in the absence of express statutory rules in a State (like Andhra Pradesh Rule 26(k)(i)) requiring presence of both parties for registration of an Extinguishment Deed, the registration of such a deed by the Sub-Registrar following the procedure prescribed in the Registration Act 1908 cannot be declared void ab initio merely because one party was not present. The Sub-Registrar's role is exhausted once the document is registered, and the Sub-Registrar has no power to cancel registration. The validity of such registered documents can be challenged before the Civil Court or the appropriate statutory Forum.
On this section: Section 62 provides that rescission, alteration, or novation of contracts requires bilateral consent. The dissenting judge relied on this to argue that unilateral cancellation of the allotment deed was impermissible.
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Purbanchal Cables & Conductors P. LTD vs Assam State Electricity Board
Court's Decision & Legal Precedent
The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, is a substantive law creating new vested rights and liabilities. Being substantive law, it operates prospectively from its commencement date of 23.09.1992 and does not apply to contracts/supply orders entered into prior to this date, even if supplies were made after the Act came into force. The Act does not have retrospective operation absent express legislative language indicating such intention. However, a suit for recovery of interest alone (without principal) is maintainable under Section 6 of the Act when interest has accrued due to delayed payment after the Act's commencement.
On this section: Novation of contract was raised as a ground but Court declined to consider it as a mixed question of fact and law raised for the first time at hearing.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 62
What have the courts held on Section 62 of the Indian Contract Act?
Sanjiv Prakash v. Seema Kukreja (06 Apr 2021) is the leading judgment on this section among those set out below: Whether an SHA novates a family MoU under s.62 is a complex question for the arbitral tribunal, not an open-and-shut s.11 finding (Sanjiv Prakash). Another 2 judgments on this section are set out below, all of them from the Supreme Court. They run from 2012 to 2021.
How do I find court cases under Section 62 of the Indian Contract Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Contract Act 62, section 62 Contract Act, section 62 of the Indian Contract Act. People searching for it also type section 62 of indian contract act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with Sanjiv Prakash v. Seema Kukreja (06 Apr 2021).
When did Section 62 of the Indian Contract Act come into force?
Section 62 of the Indian Contract Act, cited as Contract Act 62, came into force on 01 Sep 1872, having been enacted on 25 Apr 1872. It is in force as at the date shown on this page.
Other sections of this Act
- 73. Compensation for loss or damage caused by breach of contract1822 words
- 23. What considerations and objects are lawful, and what not596 words
- 74. Compensation for breach of contract where penalty stipulated for577 words
- 28. Agreements in restraint of legal proceeding void512 words
- 25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law423 words
- 16. "Undue influence" defined397 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.