Implied agreement and pledge sale notice: conduct may prove revised terms, but valid sale needs effective fresh notice.

Continued operation of the overdraft, further advances, repeated account confirmations, and no timely objection were treated as conduct from which assent to revised interest terms could be inferred, so liability under the implied agreement was established. Under the law of pledge, a pawnee may sell pledged goods only after giving a reasonable notice that remains effective for the intended sale; once later dealings altered the position, a fresh notice was required before subsequent sales. Sales made before the notice period expired, and later hurried sales without a fresh notice, were therefore treated as invalid.

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Issues: (i) Whether the borrower became liable to pay interest at 3 1/2 per cent per annum on the overdraft account by an implied agreement from 17-10-1946. (ii) Whether the bank's sales of the pledged shares were valid in the absence of a fresh and reasonable notice of sale under the law of pledge.

Issue (i): Whether the borrower became liable to pay interest at 3 1/2 per cent per annum on the overdraft account by an implied agreement from 17-10-1946.

Analysis: A notice which is not accepted expressly may still operate as an implied proposal if the surrounding dealings show that the customer continued to enjoy the banking facility with knowledge of the revised term. The evidence of conduct included continued operation of the overdraft, further advances, repeated account confirmations, and absence of timely objection, which justified inferring assent to the enhanced rate despite the failure to prove direct communication of the notice in the manner alleged by the bank.

Conclusion: The liability to pay interest at 3 1/2 per cent per annum was established on the basis of implied agreement, and this issue was decided against the appellant.

Issue (ii): Whether the bank's sales of the pledged shares were valid in the absence of a fresh and reasonable notice of sale under the law of pledge.

Analysis: Under the law of pledge, the pawnee must give reasonable notice of the intended sale before exercising the power of sale, and the notice must be sufficient to enable redemption before sale. The earlier notices expired after the parties later adjusted their positions and exchanged further communications, so a fresh notice was required before the later sales. Sales made before the expiry of the time allowed by notice were premature, and the hurried sale on 20-2-1951 was also invalid for want of a fresh notice and for the manner in which it was carried out.

Conclusion: The sales prior to 20-5-1949 were invalid, the sales on and after 20-5-1949 in 1949 were upheld, the sales in 1950 were invalid, and the sale on 20-2-1951 was invalid; this issue was decided partly in favour of the appellant.

Final Conclusion: The appeal succeeded only to the extent that several sales of pledged shares were set aside, while the finding on the higher rate of interest was upheld.

Ratio Decidendi: An implied agreement may be inferred from continued dealings and acquiescence with notice of revised terms, and a pawnee's power of sale over pledged goods can be exercised only after a valid reasonable notice that remains effective for the sale in question.

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