JUDGMENT P. Govindan Nair, J. 1. These two appeals, A.S. 371 of 1960 by the first defendant, and A.S. 157 of 1960 by defendants 2 and 5, in O.S. 145 of 1952 of the District Court of Quilon, are against the decree therein in favour of the first respondent in these appeals, the State of Kerala, the plaintiff in the suit, by which the first respondent has been granted a decree for the realisation of Rs. 16,932-4-7 from defendants 1 and 2 and from the assets of one late Mr. A. G. Pandit in the hands of defendants 3 to 5. Defendants 3 to 5 are the legal representatives of the said Pandit. 2. These two appeals arise from the same judgment and can conveniently be disposed of together. 3. The first respondent alleged that the said Pandit and dependents 1 and 2 approached the Travancore State with a proposal for exploiting the Ceramic resources of the State. It is stated that the terms and conditions of the agreement were reduced to writing, a duplicate copy of which is Ext. P-3. Defendants 1 and 2 and Mr. Pandit formed themselves into a partnership firm under the name "The Associated Mining Agency Ext. P-3 provided that the Government of Travancore will at their cost acquire land specified by the Associated Mining Agency, who are termed agents for starting mining operations and for putting up refinery and other appurtenances and offices, quarters, etc., and also advance to the agents a sum of Rs. 1,50,000 towards prospecting expenses and to meet the capital outlay. According to the first respondent, a sum of Rs. 1,57,192-15-8 was advanced and the agency functioned from 13th December 1913 to 22nd March 1948. By the order dated 16th February 1948, the Government ordered termination of the agency and the management of the institution was taken over by the Ceramic experts of the Government on 22nd March 1948 on behalf of the Government. 4. It is alleged in paragraph 6 of the plaint: "The agents however failed to put up a refinery having the stipulated capacity and the working of the concern by the agents far from being reasonably remunerative, resulted in great loss. "� And in sub-paragraphs (a) to (m) of paragraph 11 of the plaint various amounts have been claimed totalling a sum of Rs. "� And in sub-paragraphs (a) to (m) of paragraph 11 of the plaint various amounts have been claimed totalling a sum of Rs. 1,41,441-15-7, as damages, for alleged losses caused to Government by the agents by their nonfeasance and acts of malfeasance and misfeasance and also arising from the liability of the agents to account to the principal. 5. The appellants, who had filed separate written statements, denied any liability and prayed for the dismissal of the suit. The court below observed: "Though in the plaint there is a general allegation of nonfeasance, misfeasance and malfeasance against the agents, no particulars of these are given in the plaint and the learned Government Pleader also, at the time of the hearing of the case rested the plaintiff case solely on the breach of contract referred to above."� The first respondent contended that one of the terms of the contract was that the refinery to be installed must have a capacity to produce ten tons of fine clay per day and that the one actually installed had a capacity of only three tons per day. After consideration of the evidence, the court below found that there was such a breach of contract. Even so it was argued on behalf of the defendants that there was no liability to account for any loss to the plaintiff or to pay any compensation for any loss that might have occurred. This contention did not find favour with the court below and it said: "I should have been prepared to accept this argument if only there was no breach on their part of a vital term in the contract which related to the construction of the refinery of the prescribed capacity. In my view, the defendant cannot escape liability for all the losses which naturally flowed from the said breach."� Having said so, it considered separately each of the thirteen heads of claims mentioned in paragraph 11 of the plaint and came to the conclusion that no ground has been made out for allowing any of those claims excepting the eleventh item which is mentioned in sub-paragraph (k) of paragraph 11 of the plaint, reading: "The loss on working caused by the negligent working of the Mines and the Refinery and by the low capacity of the Refinery for which the Agents are solely responsible amounts to Rs. 16,932 as Per the balance sheet and the agents are liable to account to the principal for such loss. "� There is no appeal against the decree dismissing the suit as regards items 1 to 10, 12 and 13. Dealing with item 11, the court below said: "This is shown as the net loss for the period ended 15th March 1943. It takes in the loss for the previous years also. The balance sheet is submitted by the 1st defendant to the Government. The correctness of this figure is not disputed by the defendants. It is the admitted loss. As I have already found that the Agents are guilty of breach of contract, the defendants must be made to reimburse this amount to the Government by way of damages."� 6. This finding of the court below is strenuously attacked by the appellants counsel in both these appeals. It is not clear from the allegations in the plaint what is the exact basis of this claim. There is mention in paragraph 6 of the plaint extracted above that the agents failed to put up the refinery having the stipulated capacity. But it is not mentioned that the loss, if any, was the result of the failure to put up such a refinery. On the other hand, having stated the fact: that the agents failed to put up the refinery having the stipulated capacity, the allegation proceeded "..and the working of the concern by the agents far from being reasonably remunerative, resulted in great loss."� 7. In sub-paragraph (k) of paragraph 11 it is stated that the loss on working caused by the negligent working of the mines and the refinery and by the low capacity of the refinery is Rs. 16,932. Assuming that this signifies that there is an allegation that one of the reasons for the loss is attributed to the low capacity of the refinery, it is clear that at least an equal part of the loss is attributed to the negligent working. Dealing with acts of misfeasance and malfeasance the court below said, as pointed out earlier, that no particulars had been given in the plaint regarding such acts and that at the hearing the case was rested solely on the breach of contract. There is also no evidence in the case about any particular negligence or acts of misfeasance or malfeasance by the agents. There is also no evidence in the case about any particular negligence or acts of misfeasance or malfeasance by the agents. How much out of Rs. 16,932 is loss attributable, if at all, to the refinery not having the ten ton capacity is not stated and there is no material available to apportion the loss. The sum of Rs. 16,932 is the total loss that had accrued for the whole period ending on the 15th of March 1943 and from Ext. P-2 balance sheet it is seen that the loss for the period for which the balance sheet was prepared is Rs. 5,068-10-0. The Government by their letter, Ext. P-22, dated 3rd September 1946, specifically told the agents to stop all work by the concern from the 21st of Chingam 1122 (6th September 1946). The agents must have stopped work accordingly. At any rate, there is no case and much less any evidence, that this order had not been complied with. So, for nearly eighteen months before the 15th March 1943, the concern had not been working. The amount of salaries that had been paid for the period for which Ext. P-2 balance sheet has been prepared, it is seen from Ext. P-2, amounts to Rs. 5,471 and odd. Though the Government ordered the agents to stop all work from the 21st of Chingom 1122, for some reason, not known, they chose to terminate the agency only by their letter of the 16th February 1948 and took over the management only on 22nd March 1948. If simultaneously with Ext. P-22 the agency was also terminated, a substantial portion of the loss now claimed, at least the amount that has been paid towards salaries, could have been avoided. Assuming that the loss of Rs. 16,932 and odd is attributable equally to the breach of contract in not having installed a refinery of the requisite capacity and the negligent acts of the agents, practically the whole of the loss attributable to the breach of contract could have been avoided by the Government taking prompt action for terminating the agency after having asked the agents to stop all work. What is perhaps more important is there is no evidence whatever, not even formal, that any part of the loss actually sustained as seen from Ext. P-2 was due to the lack of capacity of the refinery. What is perhaps more important is there is no evidence whatever, not even formal, that any part of the loss actually sustained as seen from Ext. P-2 was due to the lack of capacity of the refinery. Four witnesses have been examined on the side of the first respondent, but none of them have even sworn that any part of the loss of RS. 16,932 was caused by the inadequacy of the production resulting from the want of capacity. In this state of the evidence, it is not possible to hold that it has been established that any loss resulted from the breach of the contract to instal a refinery of ten ton capacity. And there is nothing to indicate that the agents had acted carelessly or negligently or were not diligent in the working of the concern and no attempt was made to support the decree of the court below on that basis by the learned Government Pleader, and we think, rightly. 8. The liability of an agent when he carries on the business of the principal against the directions given by the principal, or when he acts otherwise than in accordance with the directions of the principal, is provided in section 211 of the Indian Contract Act, which reads : "An agent is bound to conduct the business of his principal according to the directions given by the principal, or, in the absence of any such direction, according to the custom which prevails in doing business of the same kind at the place where the agent conducts such business. When the agent acts otherwise, if any loss be sustained, he must make it good to principal, and if any profit accrues, he must account for it. "� A reference to the illustrations to the section clearly indicates that the liability imposed by the section to make good loss when he had not acted according to the directions of the principal is in cases where the loss is the direct result of the failure to carry out the directions of the principal, It appears to us that there must be an intimate connection, at least a nexus, between the failure to carry out the direction and the loss in carrying out the business. In other words, the loss must be due to the disobedience to comply with the dictates of the principal. In other words, the loss must be due to the disobedience to comply with the dictates of the principal. The measure of damages in such cases is only the actual loss. For instance, in cases where a limit is placed on the price at which an agent can sell the goods of the principal and on the agent selling the goods below that price, the measure of damages is only the actual loss sustained by the principal, and not the difference in prices at which the goods were sold and the limit of price placed on the goods by the principal. (See Indian Contract & Specific Relief Acts by Pollock and Mulla, Eighth Edition, page 661.) 9. The connection between the acts of the agent in disregard of the directions of the principal and the loss has not been established in this case. Assuming there is any such connection, there is also no material whatever to assess the quantum of damages. The decree of the court below is unsupportable. We, therefore, allow both these appeals with costs and set aside the decree of the court below.