Bajaj Textiles Ltd v Gian Singh & Co Ltd

• Jurisdiction: Singapore
• Judge: J W D Ambrose J
• Judgment Date: 29 February 1968
• Neutral Citation: [1968] SGFC 3
• Docket Number: Civil Appeal No Y37 of 1967
• Date: 29 February 1968
• Published date: 19 September 2003
• Year: 1968
• Plaintiff Counsel: KA O'Connor (Drew & Napier)
• Citation: [1968] SGFC 3
• Defendant Counsel: LAJ Smith and VKS Narayanan (LAJ Smith)
• Court: Federal Court (Singapore)
• Subject Matter: Right of set-off,Particular causes of action,Debt and Recovery,Whether running account is cause of action in common law,Cross-claim,Account,Limitation of Actions,Payment on running account – Whether time starts running from time of transaction or from each subsequent payment

This appeal arises out of an action in which the plaintiffs, Bajaj Textiles Ltd, claim $1,336.35, being the balance of the price of goods sold and delivered to the defendants, Gian Singh & Co Ltd. The appeal is brought by the plaintiffs and concerns the defendants` counterclaim for $690,377.66 on a running account. The defence to the counterclaim is that the defendants owe the plaintiffs $11,846 on the running account.

The trial judge held that a claim on a running account is a cause of action known to the law, and ordered that the registrar take an account of all transactions on the running account between Gian Singh & Co and Bajaj Textiles and Gian Singh & Co Ltd and Bajaj Textiles Ltd from 14 May 1951 to 31 November 1962 and kept in the books of Gian Singh & Co and Gian Singh & Co Ltd.

The plaintiffs appeal against the decision of the trial judge on four grounds.

Before I proceed to consider them, I will state the history and nature of the dealings between the parties as found by the trial judge. I quote his own words:

From the evidence before me the following facts emerged. Hardial Singh, Inder Singh, Hira Singh and Balwant Singh are brothers. Prior to 1951 they were all partners in the firm of Gian Singh & Co, the firm of Bajaj Textiles and some other firms in Singapore, Malaya and India. Gian Singh & Co was the firm which indented goods from all over the world and had all the necessary banking facilities. In 1951 the partnership was dissolved. Hira Singh and Balwant Singh took over and carried on the business of Gian Singh & Co and Inder Singh took over and carried on the business of Bajaj Textiles as sole proprietor. Prior to the dissolution of the partnership large quantities of goods had been order from all parts of the world by Gian Singh & Co and confirmed letters of credit through banks had been established and firm contracts had been entered into. Under the deed of dissolution of the partnership these goods when they were received by Gian Singh & Co were to be divided in the proportions - 27 1/2% to Hardial Singh, 25% to Inder Singh, 233/4% to Hira Singh and 233/4% to Balwant Singh. The brothers were to pay to Gian Singh & Co for the goods delivered to them. After the dissolution of the partnership, Gian Singh & Co delivered the goods to the brothers as and when they arrived. In January 1952 Gian Singh & Co Ltd, the defendants, were established which took over all the assets and liabilities of the firm of Gian Singh & Co and Balwant Singh became and is still the managing director. On 17 September 1951 Bajaj Textiles Ltd, the plaintiffs, were incorporated and Inder Singh became and still is the managing director. One of the objects of the plaintiff company was `to acquire the business and the goodwill of the business carried on at Singapore under the name or style of Bajaj Textiles, or any part or parts thereof and the assets and property or any part of the assets and property of such business and for this purpose to enter into and carry into effect with or without modification any necessary agreemen t or agreements`.

The first ground of appeal is that the trial judge erred in permitting the defendants to put forward a counterclaim for the amount due on a running account which is not a cause of action known to the common law. In my opinion, the amount due on a running account is a cause of action known to the common law. The authority for this view is Re Footman Bower & Co Ltd [1961] 2 All ER 161 where Buckley J said at p 165:

In the case of a current account where the debtor-creditor relationship of the parties is recorded in one entire account into which all liabilities and payments are carried in order of date as a course of dealing extending over a considerable period, the true nature of the debtor`s liability is, in my judgment, a single and undivided debt for the amount of the balance due on the account for the time being without regard to the several items which as a matter of history contribute to that balance.

The trial judge found there was a running account in the present case between the plaintiffs and the defendants. He said:

From the evidence I find that the dealings between the parties consisted mainly of goods sold and

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