JUDGMENT : Mohammed Nias C.P., J. The defendant in O.S. No. 55 of 1990 on the files of the Principal Sub Court, Palakkad, is the appellant herein. 2. A suit was instituted for the realisation of money by the respondent herein, a partnership firm which was a wholesale dealer in industrial minerals. The plaintiff alleged that they had entered into an agreement with the defendant/appellant for the supply of sweetener lime stones at the rate of 100 to 150 metric tonnes per day to be increased to 300 metric tonnes necessary for the manufacture of cement, as per Order dated 28.04.1998. On the request of the defendant, the plaintiff had identified good limestones from Cuddappa and Dronachalam and a report was sent to the defendant quoting the ex-mine rates given by the Andhra Pradesh Government. 3. The plaintiff later informed the defendant, through a letter dated 16.07.1988, that the materials could be moved out of Andhra Pradesh only on payment of mineral rights tax. Accordingly, the defendant amended the purchase order and agreed to pay the extra mineral rights tax and surcharge in addition to the costs of the materials, transportation charges, and other expenses already agreed upon. The purchase order was accepted by the plaintiff by letter dated 08.08.1988. It is alleged that the defendant declined to take delivery of 480.12 MT of materials on the ground that the items supplied were below the prescribed standards. The plaintiff thereupon informed the defendant of its inability to supply the variety and supplied certain other varieties and requested the defendant to allow the plaintiff to take back the unaccepted quantity. The defendant did not give any reply. It is stated that the cost of unaccepted materials would come to Rs. 1,13,000/-. The plaintiff had sent a notice claiming the above amount, and on its refusal, the suit was filed for the above amount. 4. The defendant had refuted the claim of the plaintiff and had also raised a counter claim for damages alleging breach of contract on the part of the plaintiff. The trial court, through its judgment, decreed the suit, allowing the plaintiff to realise a sum of Rs. 1,13,000/- as the value of the rejected quantity of 480.120 MT of limestone, less the amount actually received by the plaintiff. 5. The trial court, through its judgment, decreed the suit, allowing the plaintiff to realise a sum of Rs. 1,13,000/- as the value of the rejected quantity of 480.120 MT of limestone, less the amount actually received by the plaintiff. 5. The counter claim raised by the defendant was considered as Issue No. 4, and relying on clause 13 in Ext. A1, held that the defendant was entitled to recover the damages claimed, but it was limited to Rs.10,00,000/-. 6. Against the said judgment and decree, the plaintiff filed A.S.No.701 of 1992 before this court, wherein by judgment dated 23.01.2003, the matter was remanded to the trial court for examining the claim of the defendant as regards the claim for damages, in accordance with law. Both parties were given the liberty to adduce fresh evidence. It was held that it was for the defendant to establish, based on evidence, the damages caused to him. The appeal was allowed to the extent stated above. 7. After remand, through the judgment dated 29.09.2004, the trial court found that the defendant could not prove the actual loss claimed and accordingly found the defendant not entitled to claim any amount as damages from the plaintiff and thus the counter claim was dismissed. The present appeal is preferred by the defendant against the rejection of the counterclaim. 8. The learned counsel appearing for the appellants would argue that the documents produced by the defendant would show contemporaneous purchase, which meant that the defendant had to purchase raw materials from others, as the plaintiff admittedly did not comply with the conditions in the Ext.A1 agreement. Thus, he contends that as the breach is admitted, clause 13 of A1 applies, and since liquidated damages have been fixed, without any proof of further damage, he was entitled to the amounts stipulated. It is also argued that the B14 document would show the other transactions the defendant was constrained to enter into, as the plaintiff did not conform to the agreement. Judgments in Oil & Natural Gas Corporation Ltd. v. SAW Pipes Ltd. [MANU/SC/0314/2003], Kailash Nath Associates v. Delhi Development Authority [MANU/SC/0019/2015] and Malabar Cements Ltd. v. K.K. Chandrababu and Ors. [MANU/KE/1188/2019] were relied on to substantiate that in the instant case, the breach was virtually admitted, and therefore, he was entitled to the liquidated damages, even if no separate proof of actual damage was proved. 9. [MANU/KE/1188/2019] were relied on to substantiate that in the instant case, the breach was virtually admitted, and therefore, he was entitled to the liquidated damages, even if no separate proof of actual damage was proved. 9. Though the respondent is served, there is no appearance. Though an attempt was made to settle the matter, the same failed as the respondent did not appear for mediation. Earlier, this court had passed the following order on 22.01.2026: “It is submitted by the learned counsel for the appellant that the appellant is ready for mediation. Even though notice has been served, there is no representation for the respondent. An authorised officer of the appellant shall appear before the District Co- ordinator/District Judge, District Mediation Centre, District Court Complex, Palakkad at 11.00 a.m. on 19/02/2026 and furnish the available details of the respondent. The Co- ordinator shall attempt to contact the respondent and explore the possibility of settlement through mediation. Post after receipt of mediation report.” 10. Heard the learned counsel for the appellant; perused the records. 11. As per Ext.A1 purchase order issued by the appellant, 100 to 150 metric tonnes of limestone had to be supplied by the respondent/plaintiff. Clause No. 13, which is the basis for making the counterclaim, is extracted below: “13. LIQUIDATED DAMAGES:- Time and delivery is the essence of this contract. Unless you refuse to accept the order within 15 days from the date of issue of order, the order is deemed to have been accepted by you. If you fail to execute the supply within the delivery period mentioned, you will be liable to pay Liquidated Damages at the rate of ½ percentage per week of delay on the unexecuted portion, subject to a maximum of 10 percentage of the full order value. For undue delay in supply, we will be at liberty to cancel the whole or part of the order and purchase the material from any other source at your own risk and cost.” 12. As stated above, the suit and the counter claim were initially decreed. As against the decree granted to the plaintiff, no appeal was filed by the defendant, and it was only the plaintiff who challenged the grant of the counterclaim in A.S.No.701 of 1992. As stated above, the suit and the counter claim were initially decreed. As against the decree granted to the plaintiff, no appeal was filed by the defendant, and it was only the plaintiff who challenged the grant of the counterclaim in A.S.No.701 of 1992. The said appeal was remanded as follows: “Counsel appearing for the appellant submitted that the court below has committed an error in blindly following clause 13 and awarding damages to the tune of Rs 10,00,000/- without any adjudication as such. Counsel submitted, assuming that clause 13 applies, it is the duty of the court to adjudicate the claim, if any. This legal position has been well settled. Counsel referred to various decisions such as Fateh Chand v Balkashal Dass J AIR 1963 S.C. 1405 ), Union of India v. Raman Iron Foundry AIR 1974 S.C. 1265 ), State of Kerala v. United Shippers and Dredgers (1982 KLT 736] and FACT Engineering Works v. Kerala Industries ( 2001 (3) KLT 250 ). We are of the view appellant is justified in contending that the court is bound to assess the damages caused rather than blindly following clause 13. We are of the view the 51 approach made by the court below is illegal and contrary the principles laid down in the aforementioned decisions. In such circumstances, we are inclined to set aside the decree as far as the award of Rs 10 lakhs concerned towards damages. That part of the judgment and decree would stand set aside. Matter is remitted to the court below for examining the claim of the defendant in accordance with law. It is open to the parties to adduce evidence. Court below would determine what would be the damages caused to the defendant, if any. It is for the to establish on the basis of evidence as to the damages caused to him on the basis of the transaction entered into between the parties. The appeal is allowed to the extent indicated above. Matter is remanded back to the court below. Appellant would be entitled to get half of the court fee paid on the appeal.” 13. It is clear from the above that the remand was actually for considering the question of quantification of the counter claim raised. After remand, the trial court noted that no further evidence was adduced by the parties. Appellant would be entitled to get half of the court fee paid on the appeal.” 13. It is clear from the above that the remand was actually for considering the question of quantification of the counter claim raised. After remand, the trial court noted that no further evidence was adduced by the parties. The trial court also observed that the High Court had found a breach on the part of the plaintiff, and the remand was only for considering the quantum of damages. 14. It is to be stated that a sum of Rs.8,62,753/- was claimed as damages under clause 13 of Ext. A1. Apart from the above, the defendant had also claimed a sum of Rs.7,16,538.73/- as damages towards the actual loss sustained by the defendant in arranging a fresh supply of sweetener lime stones from other suppliers due to the default of the plaintiff. However, the claim was limited to Rs. 10 lakhs. The evidence adduced in the case included the deposition of DW2, the purchase manager of the defendant company and Exts. B9 to B14. Though the plaintiff attempted to justify the reason for non-supply, the trial court rightly did not consider the same in view of the order of remand passed by this Court. 15. The amount claimed by the defendant was the maximum of 10% in the full order value, as seen from Ext. A1. But how the same was quantified or the basis for the alleged loss is not substantiated in the counter claim filed. Even the contention of the defendant that since the plaintiff failed to supply as agreed, it had to make alternate arrangements to procure the raw materials from other sources, was not pleaded or proved. An amount of Rs.7,16.538/- was claimed as loss in arranging such supply. Though DW2, the purchase manager was examined, he deposed that he was not the purchase manager at the relevant time, and B9 to B13 series were only invoices for the supply of sweetener lime stones by different firms. It cannot be seen from the above invoices or the sales that the company had to procure the items mentioned therein because the plaintiff had effected a short supply. 16. Ext.B14 is stated to be a statement showing the loss suffered by the defendant. Even DW2 did not say that the transactions mentioned in Exts. It cannot be seen from the above invoices or the sales that the company had to procure the items mentioned therein because the plaintiff had effected a short supply. 16. Ext.B14 is stated to be a statement showing the loss suffered by the defendant. Even DW2 did not say that the transactions mentioned in Exts. B9 to B13 are made due to the default of the plaintiff to supply the materials as per the contract. Far from that, DW2's evidence shows that the plaintiff's company had engaged other transporters also for the supply of sweetener lime stones and that there was breach from them also. Under such circumstances, no reliance could have been placed on Exts.B9 to B13 to hold the plaintiff responsible for the loss claimed. This has to be read on the basis of the plea in the counter claim, where also no details are stated regarding the purchases made after the plaintiff allegedly committed the breach. As a matter of fact, it was stated in the written statement that the details regarding the date and quantity supplied would be furnished later, but the same was never done. In view of the above, the finding of the trial court that the defendant could not establish the quantum of damages sustained is only to be upheld. That apart, Ext. B14 is not authenticated by any person, nor does it contain the seal of the defendant company. Under such circumstances, no reliance could have been placed on Ext.B14. 17. The argument on behalf of the appellant is that since liquidated damages were specified even in the absence of proof, the defendant ought to have been granted a decree. As rightly held by the trial Court relying on the judgment of the Supreme Court in Fateh Chand v. Balkashal Dass [ AIR 1963 SC 1405 ] and also, FACT Engineering Works v. Kerala Industries [ 2001(3) KLT 250 ] that even if a certain sum is mentioned as liquidated damages, the parties are entitled to receive only such amount suffered as loss and in the absence of anything to prove the actual loss suffered by the defendant, mere fact that the liquidated damages were specified will not help the defendant. The differences as regards Sections 73 , 74 and 75 of the Contract Act was considered by this Court in State of Kerala v. United Shippers and Dredgers [ 1982 KLT 738 ] and the same was taken note by the trial court to hold Section 74 is only supplementary to Section 73 and it does not in fact make any departure from the principle behind , which mandates that for claiming compensation, proof of injury suffered had to be established. Even in cases where quantification of loss or damage is not possible, the party who had suffered on account of breach will still have to request the court to assess reasonable compensation on the materials available. 18. This aspect has, in fact, been considered by the Supreme Court in Kailash Nath Associates (supra) and held as the expression “whether or not actual damage or loss is proved to have been caused thereby” means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded. 19. It is trite that, under Section 74 of the Indian Contract Act , where the proof of loss or damage arising out of a breach of contract is a sine qua non for payment of compensation for breach of contract. Even in cases of liquidated damages, it must be held that the contract of damages is to cover losses and not to profit for penalising a party in breach. In the case of liquidated damages where the damage clause is in the nature of a penalty, reasonable compensation not exceeding the amount stipulated has to be awarded, depending upon what the Court considers as a reason. In view of the above, the finding of the trial court that the defendant could not substantiate their claim for damages from the plaintiff calls for no interference. The evidence, both oral and documentary, has been considered in the correct perspective. The facts and the law have been appropriately considered. There is no merit in the appeal, and the same will stand dismissed. Sd/-