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CA Foundation · Business Laws · The Indian Contract Act, 1872

Vikram owes Rs 30,000 to Wasim on a debt barred by limitation since last year. Vikram signs a written promise, before the expiry of any further time, to pay Rs 12,000 of that debt to Wasim. Wasim sues on this promise. What is the legal position?

Vikram is bound only for Rs 12,000. A signed written promise to pay a time-barred debt, wholly or in part, needs no consideration, and it binds the promisor to the extent promised. Registration is not required, and he is not liable for the rest of the debt.

  1. AVikram's promise is void because the debt is time-barred and there is no consideration
  2. BVikram's promise is enforceable only for Rs 12,000 as a written promise to pay a time-barred debt, but he is not bound for the balanceCorrect
  3. CVikram's promise is enforceable for the entire Rs 30,000
  4. DVikram's promise is enforceable only if it was also registered

Explanation

A written and signed promise to pay a time-barred debt, wholly or in part, is enforceable without consideration. The promise is limited to what is promised, namely Rs 12,000, so Vikram is not bound for Rs 30,000. The option calling the promise void ignores this exception, and registration is not required.

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