JUDGMENT 1. Appellant plaintiff is the Fertilisers and Chemicals Travancore Limited. Management trainees (technical) were selected by the appellant for absorption into service after two years of training. First respondent was one of the trainees selected. He accepted the selection and joined as trainee after executing Ext. A-3 bond on 1st September 1980, along with respondents 2 and 3, agreeing to undergo training for two years and then join service to continue there for a minimum period of five years. Further provision in Ext. A-3 is that in case of breach of conditions by the trainee, Rs. 10,000 is to be paid as reasonable compensation for the damages likely to be incurred by the FACT.. First respondent underwent training for five months and received the stipend of Rs. 4,000, at the rate of Rs. 800 per month. Then he unilaterally resigned and went, away. The suit for realisation of the amount agreed on Ext. A-3 as damages was dismissed on the ground that the appellant failed to plead and prove sustenance of damages and its quantum. 2. One of the contentions of the respondents was that the first respondent resigned on medical grounds, due to reasons of health peculiar to the locality and establishment and hence no liability is incurred. The trial court rightly rejected that contention as it is absolutely unsupported by any item of evidence. If so, the only question to be considered is whether dismissal of the suit for want of plea and proof of actual damages could stand. 3. Ext. A-3 says that the liquidated damages of Rs. 10,000 was fixed after considering the reasonable damages likely to be suffered by the appellant. When the first respondent sent Ext. A-4 resignation letter, he was called upon by Ext. A-5 on 23rd January 1981 to remit the amount. After many items of correspondence, Ext. A-8 suit notice was issued. In Ext. A-12 reply, the first respondent did not question the damage or reasonableness of the amount. He admitted his liability for the amount and wanted only reduction of amount by way of concession or leniency. 4. Though the selection of trainees is for absorption into service after training, the management is not bound to appoint the trainees. That could only be understood as a provision intended to safeguard the interest of the management by refusing appointment of a trainee, who is found unsuitable. 4. Though the selection of trainees is for absorption into service after training, the management is not bound to appoint the trainees. That could only be understood as a provision intended to safeguard the interest of the management by refusing appointment of a trainee, who is found unsuitable. A trainee, who accepts the selection and joins training after entering into a bond, binds himself to undergo the training and then accept regular appointment, if offered, for a minimum period of five years. The process of selection itself involves time, energy and expenses for the management. That is the case of training also. Over and above other items of expenses for the training, including salary to the training staff, each trainee is getting Rs. 800 per month for the first year and Rs. 850 per month for the next year from the management. The management is doing all these things only to procure the services of proper persons. The management will definitely incur loss when a trainee breaks the conditions of the bond and walks off. The damage incurred is not only confined to the time, energy and expense, including the stipend; the management is also deprived of the expected services of a competent person, for which fresh selection and training may become necessary. Training is not intended to elicit work from the trainees even though as part of the training they will be doing some work also. I do not agree with the trial court in its opinion that the work done by the trainees during the period of training will sufficiently compensate the management and hence no question of damage will arise. Breach of bond by the trainee is, therefore, essentially an aspect involving damages to the management. If so, the only question will be the quantum. 5. In a case like this, it is not practicable to fix a specific amount as damage. Expenses are incurred on various items right from the time of calling applications upto the conclusion of training. That is for selection and training as a whole and not for one individual alone. In that respect also, there are items for which assessment of pecuniary loss is not possible. That is the case with loss of services and damages due to the need for fresh selection. That is for selection and training as a whole and not for one individual alone. In that respect also, there are items for which assessment of pecuniary loss is not possible. That is the case with loss of services and damages due to the need for fresh selection. I think that it may be fairly correct to say that the case in hand is one in which assessment of pecuniary damages is impossible. The case requires consideration in this background. 6. It is true that the claim made in the plaint is not on the basis of any assessment of reasonable damages. What is claimed is the liquidated damages agreed in Ext. A-3. The plaint proceeds as if that is the reasonable damages suffered and as agreed so between the parties, the plaintiff is entitled to get the same. No evidence was also adduced regarding the quantum as it was impossible. The question is whether, in such a situation, the court has only to dismiss the suit on the ground, that plaintiff failed to plead and prove reasonable damages or whether the court can assess and grant reasonable damages. 7. Under S.73 of the Contract Act, when a contract is broken, what is recoverable is only the loss or damage caused, which naturally arose in the usual course of things from the breach or which the parties knew, when they made the contract, to be likely to result from the breach of it. S.74 has to be read along with S.73 as S.74 is only supplementary to S.73. Irrespective of the amount stipulated in the contract, whether it is liquidated damages or by way of penalty, the party complaining of breach is entitled to get only reasonable compensation and the amount stipulated could be taken only as the outer limit. This is irrespective of the question whether or not actual damage or loss is proved to have been caused. If the extent of loss or damage is capable of being proved, such evidence provides a safe guide for the court to determine the quantum of reasonable compensation. If quantification of the loss or damage is not possible, even then the party, who suffered, can request the court to assess reasonable damage provided there is damage [State of Kerala v. United Shippers and Dredgers 1982 K.L.T. 738]. 8. If quantification of the loss or damage is not possible, even then the party, who suffered, can request the court to assess reasonable damage provided there is damage [State of Kerala v. United Shippers and Dredgers 1982 K.L.T. 738]. 8. Undoubtedly, the plaintiff has the duty to prove the damages actually suffered by it irrespective of the question whether the amount specified in the document is penalty or only liquidated damages. In discharging that burden, the estimated stipulation as to damages in the contract itself could be taken as evidence, even though it is not conclusive evidence. If the evidence shows that the stipulated amount is fair or that actual damages may be even above that figure, the court can abide by the stipulation in the contract. When the stipulation is unreasonable, independent proof may be necessary. A genuine pre-estimate of damages by non-trial agreement is regarded under English Common Law as a stipulation naming liquidated damages and binding between the parties: a stipulation in a contract in terrorem is a penalty and the court refuses to enforce it, awarding to the aggrieved party only reasonable compensation. But the Indian Contract Act has sought to cut across these rules by enacting a uniform principle of entitlement to reasonable compensation alone irrespective of, the question whether what is provided is penal or only liquidated damages. Pecuniary liability, therefore, arises only when the liability is fixed by the court [Union of India v. Raman Iron Foundry A.I.R. 1974 S.C. 1265]. 9. Irrespective of the question whether there are independent allegations and proof of the quantum of reasonable damages, a suit for realisation of the liquidated damages agreed in the contract is a suit for recovery of damages sustained on the breach of the agreement. Entitlement to reasonable compensation, as the section itself says, is "whether or not actual damage or loss is proved to have been caused thereby".' If there is no evidence showing that the pre-estimate made by the parties is unreasonable or excessive, that pre-estimate itself could be evidence, though not conclusive, in the absence of any other evidence. Such an interpretation found favour with the Supreme Court in Fateh Chand v. Balakisan Das A.I.R. 1063 S.C. 1405. In a case involving actual damage, what is conferred on the court is the jurisdiction in adjudging the claim to decide whether it is reasonable or not. Such an interpretation found favour with the Supreme Court in Fateh Chand v. Balakisan Das A.I.R. 1063 S.C. 1405. In a case involving actual damage, what is conferred on the court is the jurisdiction in adjudging the claim to decide whether it is reasonable or not. That jurisdiction could be exercised on a consideration of all the facts and circumstances proved including the agreement itself. Mere absence of specific plea or independent proof of actual damages need not necessarily induce the court to overrule the claim and dismiss the suit [Subir Ghosh v. Indian Iron and Steel Co. 1976-77 (81). C.W.N. 199]. 10. The effect of S.74 of the Contract Act is only to disentitle the party from getting whatever is provided, in the document whether as penalty or liquidated damages and confining the claim within reasonable limits subject to the maximum of the amount so fixed. In a case where monetary value of the loss or damage is incapable of proof, the court can assess reasonable damages even if actual damage or loss is not proved. From the facts discussed above, it is clear that this is a case in which the appellant sustained damage, but quantum is incapable of proof. Therefore, the claim was based on the pre-estimate made by the parties. Nothing prevents the court from assessing reasonable compensation from the facts and circumstances keeping in mind the bona fide estimate of the parties. At any rate, the amount of Rs. 4,000 received by the first respondent as stipend could be taken as reasonable damages without anything more. A request came from the respondents that the award of damages, if any, may be limited to this amount in the peculiar circumstances under which the first respondent had to stop the training though he was not able to prove the circumstances. I think that the ends of justice is not going to suffer by granting that request. The appeal is allowed. Dismissal of the suit is set aside. Instead, there will be a decree in favour of the appellant to realise Rs. 4,000 as damages from the respondents and their assets with 6 per cent interest from the date of suit till realisation and cost proportionate to success in both courts. Respondents will suffer costs in both courts.