Written promise to pay a time-barred debt is enforceable under Section 25(3) when signed and intended as a new obligation.

A written and signed promise to pay a debt that has become time-barred is enforceable under Section 25(3) of the Indian Contract Act, 1872, even if the writing does not expressly state that the debt is barred by limitation or that the debtor knew it was so. The Court also treated the 1931 khata as a fresh promise creating a new contractual obligation, not a mere acknowledgment of an existing debt, because its language showed an intention to repay the stated sum. On that basis, the statutory requirements were satisfied and the suit was maintainable.

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Issues: (i) whether the khata of 1931 was a mere acknowledgment of an existing debt or a fresh promise creating a new contract; (ii) whether a written promise to pay a debt that had become time-barred was valid consideration under Section 25(3) of the Indian Contract Act, 1872.

Issue (i): Whether the khata of 1931 was a mere acknowledgment of an existing debt or a fresh promise creating a new contract.

Analysis: The recital that cash had been received did not reflect the true transaction, but the document did not merely refer to a balance already found due. Its language, read as a whole, indicated a new promise to repay the amount stated. A mere acknowledgment necessarily imports an existing debt, whereas the wording here showed that a new contractual obligation was intended.

Conclusion: The khata of 1931 was a fresh promise creating a new contract, not a mere acknowledgment.

Issue (ii): Whether a written promise to pay a debt that had become time-barred was valid consideration under Section 25(3) of the Indian Contract Act, 1872.

Analysis: Section 25(3) validates a written and signed promise to pay a debt which could no longer be enforced because of limitation. The provision does not require proof that the debtor knew the debt was time-barred, nor does it require the writing to describe the debt expressly as past or barred debt, so long as the promise is in writing, signed, and relates to such a debt. On the facts, the old debt formed the consideration for the new promise and the statutory requirements were satisfied.

Conclusion: A written promise to pay the time-barred debt was valid consideration under Section 25(3), and the suit was maintainable.

Final Conclusion: The appeal succeeded, the decree of the lower appellate Court was set aside, and the trial Court's decree in favour of the plaintiff was restored with costs.

Ratio Decidendi: A written and signed promise to pay an otherwise unenforceable debt is enforceable under Section 25(3) of the Indian Contract Act, 1872, even if the writing does not expressly state that the debt was time-barred or that the debtor knew it to be so.

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