JUDGMENT

(Prayer: The suit is filed under Order IV Rule 1 of O.S. Rules read with Order VII Rule 1 CPC Section 7 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act,2015, praying to (a) direct the defendant to pay a sum of Rs.16,52,82,984/- (Rupees Sixteen Crores Fifty Two Lakhs Eighty Two Thousand Nine Hundred and Eighty Four only); (b) for further interest at 24% p.a. On the sum of Rs.16,52,82,984/- from the date of filing of the suit till the date of realization; and (c) for the costs of the suit.)

1. The suit was instituted for the recovery of a sum of Rs.16,52,82,984/- from the defendant with further interest thereon at 24% from the date of filing of the suit until realization.

2. The plaintiff stated that it was engaged in the manufacturing and trading of iron and steel products. According to the plaintiff, the defendant carries on the business of dismantling defunct factories and selling the salvage as scrap. Since scrap may be used as raw material for manufacturing and trading of iron and steel, the plaintiff and defendant had a long period of association. The plaintiff further stated that KIOCL Limited (previously known as Kudremukh Iron Ore Company Limited) floated a tender on 16.01.2012 inviting offers for the purchase of mining and beneficiation equipment as a package on “ as is where is, no complaint basis''. The value of the contract was about Rs.200,00,00,000/-. The defendant was keen on participating in the tender and approached the plaintiff for financial support for submission of the earnest money deposit (EMD) of Rs.5,00,00,000/-. In response to the said request, the plaintiff advanced a sum of Rs.2,00,00,000/-. The said sum was advanced on the terms that the money would be repaid with interest if the defendant was unsuccessful in its bid. On the other hand, if the defendant was successful, the defendant would supply materials from and out of materials purchased by the defendant under the contract to the plaintiff to the extent of the sum of Rs.2,00,00,000/-, which the defendant received from the plaintiff.

3. The plaintiff stated that the defendant was the successful bidder and entered into a sale contract dated 12.10.2012 with KIOCL. Upon coming to know of the same, the plaintiff addressed a communication to the defendant on 18.10.2012 and requested the defendant to negotiate a deal for the supply of heavy melting steel from the materials available at the site of KIOCL. However, the plaintiff came to know that the defendant had not taken possession of the site and therefore was not in a position to honour its commitments to the plaintiff. The plaintiff further stated that the defendant approached the plaintiff once again for financial assistance. Pursuant thereto, on the same terms as earlier agreed upon, the plaintiff advanced sums of Rs.10,00,000/- on 23.11.2012 and Rs.1,93,00,000/- on 28.11.2012.

4. According to the plaintiff, the defendant failed to adhere to the commitment of supplying raw material. Meanwhile, the steel industry was facing a seasonal lull and therefore the revenues of the plaintiff dipped considerably. Therefore, the plaintiff was constrained to stop production. In these circumstances, the plaintiff stated that it issued a communication dated 07.01.2013 to the defendant and requested the defendant to repay the entire amount received from the plaintiff with interest and reasonable profit. More than a year later, the defendant took possession of the site on 29.03.2014. In response to the repeated requests for repayment, the plaintiff stated that the defendant paid a sum of Rs.16,00,000/- by RTGS in May 2016. Thereafter, no further payments were made by the defendant. Consequently, the plaintiff asserted that a sum of Rs.3,87,00,000/- is due and payable by the defendant as its principal liability together with interest at 24% per annum. Thus, the suit claim of Rs.16,52,82,984/- consists of Rs.3,87,00,000/- towards principal and Rs.13,32,92,729/- t