bash string finder in files

#!/bin/bash

arg=
case $# in
    1)
        pattern=$1
        dir=./
        ;;
    2)
        if [ -d $1 ]
        then
            dir=$1
        else
            arg=$1
            dir=./
        fi
        pattern=$2
        ;;
    3)
        arg=$1
        dir=$2
        pattern=$3
        ;;
esac

# echo "$arg"
# echo "$pattern"
# echo "$dir"

# Check incorrect argument input
if [[ $# -eq 0 || $# -gt 3 || !(-d $dir) || "$arg" != "-r" && -n $arg ]]
then
    echo Usage: strfinder [KEY] [DIR] [PATTERN]
    echo Key: -r for search in the subdirectories
    exit 1
fi

rep=true

# main loop
while [[ $rep=true && -n $pattern ]]
do
    # output pattern and target dir
    echo
    echo "Search $pattern in $dir"
    echo

    # Counter of matches
    count=0

    # work with files, witch consider pattern string
    for file in `grep $arg -l -s $pattern $dir*`
    do
        let "count++"

        # Out file and commands
        echo
        echo "Found \"$pattern\" in file: $file"
        read -p "[R]emove file, [B]an for other users, [Nothing] to do nothing: " op
        echo
        case $op in
            R | r) rm $file && echo "File $file removed" || echo "Can't remove file $file" ;;
            B | b) chmod og-wrx $file && echo "File $file was banned for other" || echo "Can't ban file $file" ;;
            "") continue ;;
            *) echo "Incorrect operation" ;;
        esac

        echo
    done

    # if pattern wasn't found
    if [ $count -eq 0 ]
    then
        echo "No files was found."
        read -p "Input new string for search: " pattern
    else
        # else break loop
        break
    fi

done

echo
echo "Done!"