This scenario involves a time-barred debt and a subsequent promise to pay it. The validity of such an agreement is governed by specific provisions of the Indian Contract Act, 1872, particularly Section 25(3).

1. Time-Barred Debt:

Under the Limitation Act, 1963, a debt becomes 'time-barred' after a prescribed period (typically three years for most simple contract debts). This means that the creditor (B, in this case) loses the legal remedy to enforce the debt in a court of law. It's crucial to understand that the debt itself is not extinguished; only the right to sue for its recovery is lost. The debt remains a 'natural obligation.'

2. General Rule of Consideration:

According to Section 25 of the Indian Contract Act, 1872, an agreement made without consideration is void. In the given scenario, the 'previous debt' is a past consideration. Generally, past consideration is not valid consideration for a fresh promise, especially when the legal enforceability of the original debt has expired.

3. Exception under Section 25(3) of the Indian Contract Act, 1872:

However, Section 25(3) provides a crucial exception to the rule that an agreement without consideration is void. It states:

"A promise made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits, is valid."

For a promise to pay a time-barred debt to be valid and enforceable under this section, the following conditions must be met:

• Promise to pay a debt: There must be an express promise to pay a debt.
• Time-barred debt: The debt must be one which the creditor could have enforced but for the law of limitation.
• In writing and signed: The promise must be in writing and signed by the debtor (A) or their duly authorized agent.
• Express promise: It must be an express promise to pay, not merely an acknowledgment of the debt. An acknowledgment of debt, if made before the expiry of the limitation period, can extend the limitation period, but it cannot revive a debt that is already time-barred.

Application to the Given Scenario:

In the problem, A owed B ₹ 1,000, and this debt is barred by the Limitation Act, 1963. Subsequently, A signs a written promise to pay ₹ 1,000 on account of the previous debt. Let's analyze this against the conditions of Section 25(3):

• Promise to pay a debt: A has made a promise to pay ₹ 1,000.
• Time-barred debt: The debt of ₹ 1,000 is explicitly stated to be barred by the Limitation Act, 1963.
• In writing and signed: A has signed a written promise to pay.
• Express promise: The act of signing a written promise to pay 'on account of the previous debt' clearly indicates an express promise to pay the time-barred debt.

Conclusion:

Since all the conditions laid down in Section 25(3) of the Indian Contract Act, 1872, are fulfilled, the agreement by A to pay ₹ 1,000 to B is valid and enforceable. Despite the original debt being time-barred, the new written and signed promise by A creates a fresh, legally binding obligation, making the agreement valid.