(b)
Given equation can be rewritten as
$\frac{x^{2}}{2 - \lambda} + \frac{y^{2}}{- \lambda + 5} = 1$
To represent an ellipse,
$2 - \lambda > 0$ and $–\lambda + 5 > 0$
$\Rightarrow \ \ \lambda < 2$ and $\lambda < 5$
$\Rightarrow \ \ \lambda < 2$