S.C.Lahiri, J. - (1.) This appeal is by the plaintiff in a suit for redemption and is directed against an order, elated 31-8-1955, passed by Sarkar, J. by which be discharged the exceptions taken by the plaintiff to the report of the Commissioner and Special Referee appointed in the suit to submit a report on certain questions referred to him. The facts which are material for the purposes of this appeal are these : On 9-3-1943 one Chandmull Batia, the predecessor-in-interest of the appellant, executed a deed of hypothecation in favour of the respondent Bank in respect of certain shares as security for advances to be made by the Bank on the plaintiff's overdraft account. By this deed of hypothecation it was agreed that the Bank was to have a margin of 40 per cent in respect of ordinary shares and 25 per cent in respect of preference shares. The limit of advances to be made to the plaintiff was originally fixed at Rs. 50,000/- but it was increased from time to time and ultimately it stood at Rs. 3,50,000/- in 1947. From August, 1948, the Bank wrote a number of letters to the plaintiff pointing out that the securities held in deposit by the Bank against the advances made to the plaintiff fell below the stipulated margin of 40 per cent and requesting the plaintiff to restore the margin either by sending sufficient funds, or by furnishing further securities. On the plaintiff's failure to restore the margin the Bank sold some of the shares in 1949 and was about to sell some more shares when the plaintiff instituted a suit for redemption on 12-5-1950, praying for redemption of the shares pledged by him on a proper accounting of all the dealings and transactions between the plaintiff and the Bank. In the plaint the principal grievances made by the plaintiff are that (a) the defendant Bank had wrongfully debited the plaintiff's account with interest in excess of the rate fixed by agreement and (b) the sale of the shares by the Bank was in breach of the terms and conditions of the said hypothecation and was contrary to law. On 5-3-1951 it was ordered and decreed with the consent of the parties that the suit be referred to Mr. B.K. Chakravarti, Bar-at-Law, to take accounts and make the following enquiries : "(1) An account of what, if any, is due on this date to the defendant Bank for principal and interest on the overdraft account mentioned in the plaint ..... (3) what shares have been sold properly by the defendant bank ..... (4) what rate of interest was agreed upon between the parties, whether 3 per cent or 3 1/2 per cent ..... Referee is to proceed on the basis of and shall not disturb (1) any settled account or (2) any account examined and accepted as correct by conduct or otherwise (3) any sale proceeds of aforesaid shares forming part of such settled accounts or any account examined and accepted as correct by conduct or otherwise as aforesaid ..... " Those portions of the consent order which have not been quoted are not material for the purposes of this appeal. Before the Special Referee the parties agreed that the only issues upon which he should submit his report were : (1) "what rate of interest was agreed upon between the parties, whether 3 per cent or 3 1/2 per cent?" and (2) "were the shares mentioned in the list submitted by the plaintiff and described as 'improperly sold', sold properly?" The report of the Special Referee was in favour of the defendant bank on both the points. The plaintiff filed exceptions to the report claiming that the rate of interest should be 3 per cent and that the sale of the shares by the defendant bank should be held to be illegal. Sarkar, J. has overruled the plaintiff's objections and confirmed the report of the Special Referee. Hence this appeal by the plaintiff.
(2.) The first point which falls for determination in this appeal is what was the rate of interest agreed upon by the parties? It is common ground that originally the rate of interest was 3 1/2 per cent Ex. 1, letter from the General Manager of the Bank, dated 29-6-1944. It is also admitted that the rate of interest was reduced to 3 per cent with effect from 1-12-1944 -- See Ex. 2, plaintiff's letter to the Manager of the defendant Bank, dated 9-12-1944, acknowledging receipt of his letter dated 7-12-1944. The defendant's case is that on 17-10-1946 the rate of interest was again raised to 3 1/2 per cent by issuing a cyclostyled copy of a circular to all the Constituents of the Bank including the plaintiff. That cyclostyled circular is Ex. 9 and runs as follows "The Bank has decided to conform to the minimum interest rates stipulated by the Calcutta Exchange Banks. You are by this letter informed that interest on your overdraft account secured by shares will be increased as from date to 1/2 per cent over Bank rate minimum 3 1/2 per cent." The defence case is that a copy of this notice was sent to the plaintiff by ordinary post and though there was no express acceptance of its terms on his behalf, there was an implied acceptance by conduct. This case has been accepted by Sarkar, J.
(3.) Mr. Meyer appearing for the appellant has argued (a) that the terms contained in the Circular--Ex. 9 cannot be said to constitute a proposal (b) that it has not been proved that the circular reached the plaintiff and (c) that the evidence on the record does not justify an inference of implied acceptance on the part of the plaintiff. Mr. De appearing for the respondent Bank has contended on the other hand, that the evidence adduced by the Bank is sufficient to prove communication of the proposal to the plaintiff and alternatively that even if the case of express proposal fails, the evidence on the record is sufficient to Justify an inference of implied proposal and implied acceptance. Upon the alternative case the argument is that there was an implied agreement between the parties to pay interest at the rate of 3 1/2 per cent from 17-10-1946, both the proposal and the acceptance being implied.;