Is settlement (OTS) agreement a novation of the Contract? – Ms. Mausumi Bhattacharjee Vs. Jumbo Chemicals And Allied Industries Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) The requisites of a novation may include elements like an agreement of all the parties to a new contract, the extinguishment of the old obligations, and the validity in supersession of old contract by the new contract.
(ii) If the contract is altered in material particulars to change its essential character, the modified contract must be read as doing away with the original contract but if the modified contract has no independent contractual force, no new contract comes into play.
(iii) The question whether a subsequent agreement is an additional to the main agreement or not; as well as the fact whether new contract supercede old contract would depend on the facts and circumstances of each case.

Is settlement (OTS) agreement a novation of the Contract? – Ms. Mausumi Bhattacharjee Vs. Jumbo Chemicals And Allied Industries Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »