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TMI Blog1927 (2) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ble upon demand from the defendant Bank. The loans were to bear interest at ₹ 8-8-0 per cent per annum and the Bank was to hold the cotton as security until directed by the plaintiff to sell them, in which case the Bank was entitled at the time of settlement to recover the loans made, along with the interest and certain charges for insurance and storage. Provision was made for variation of the rate of interest by agreement between the parties. 2. On the 18th March 1922, the Bank informed the plaintiff by letter that they intended to charge ₹ 9 instead of ₹ 8-8-0 from that date, and again on the 21st April 1922, they intimated their intention to raise the interest to ₹ 10. To these two intimations the plaintiff mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest at ₹ 9 per cant. and 10 per cent per annum, for there was no subsequent agreement by the plaintiff to pay interest at the enhanced rate. The stipulation contained in the agreement is that interest shall be charged at the rate of 8 per cent per annum or at such other rate as may be from time to time agreed upon. This shows that the Bank had reserved to itself the right to increase the rate of interest from time to time. No customer would willingly and expressly agree to an enhancement of the rate that has once been stipulated and we have, therefore, to look to the circumstances and see whether the plaintiff had accepted the increased rates. Letters, dated the 18th March 1922 and the 21st April 1922, demanding the increased rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not accept the offer to continue the loan under the higher rates in the circumstances amounted to conduct expressing acceptance of the offer of the Bank to continue the loan and make further loans, at the higher rates of interest. 5. The law on the Subject of acceptance of an offer is indicated in Sections 7, 8 and 9 of the Contract Act and these sections must be read without reference to the English Law on the subject. According to Section 7, before a proposal becomes a promise rendering the promisee liable to the conditions contained in the promise, there must be an absolute and unqualified acceptance. This acceptance must be expressed in some usual and reasonable manner unless the proposal prescribes the manner in which it is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oked to import into the transaction a promise by the promisee which is not made either expressly or impliedly. For instance, there may be a recognised trade usage according to Which a person borrowing from a Bank or overdrawing is taken to contract to pay the Bank rate of interest. It does not appear to me that English decisions as to acceptance by conduct can be invoked to extend the restrictions thus obtaining in India on the method of acceptance. Applying this law to the present case I may state that no mercantile or trade usage has been invoked by the Bank in this case. 7. We find that the Bank on the two dates when they proposed a higher rate of interest, in effect offered to continue the loans and to make further loans (up to the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff by reason of His taking a further sum subsequent to that offer. 8. If it had not been for this acceptance of a further loan I should have held that there was no acceptance by the plaintiff of the higher rates of interest. Even if the Bank had intimated in the said letters that in the event of their not hearing from the plaintiff they would presume acceptance by the plaintiff of the higher rates of interest, this would not have justified the Bank in claiming that their offer had been accepted in the manner prescribed, for it is well established in law that the manner prescribed cannot be mere silence. Assent must be by express words or positive conduct. No duty is cast by the law upon the person to whom an offer is made to reply to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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