Upload file as new version
Whenever a new upload file name is exactly same as the file already exist, give two options 1. Replace (Already there), 2. Upload as the latest version of existing file.
Roy F commented
The current behavior, to replace with loss of version history, is unexpected and not wanted. The default when uploading a file with the same name is that it should be treated as a new version. If the user wants to delete the existing file and discard its version history, they can simply delete the file prior to doing the upload.
The issue here is that when you try to upload a file into a library with the same name as an existing file, you get a misleading message. With versioning turned on, the message is "A file with this name already exists. Would you like to replace the existing one?". This implies if you hit "Replace" you will overwrite the existing file. In reality, it is uploaded as a new version.