The Supreme Court has drastically reduced a ₹2 crore compensation awarded to a woman by the National Consumer Disputes Redressal Commission (NCDRC) to ₹25 lakh, ruling that such high-value damages cannot be granted in consumer disputes without reliable evidence.
A bench of Justices Rajesh Bindal and Manmohan, delivering judgment on February 6, held that while “deficiency in service” was established in the case of a botched haircut at a luxury hotel salon, the NCDRC had erred in awarding compensation based on assumptions and unverified documents.
In April 2018, Aashna Roy, a management professional, visited a salon at the ITC Maurya Hotel in Delhi. She alleged that the stylist cut her hair drastically shorter than requested, causing her mental trauma and leading to the loss of lucrative modelling assignments.
The NCDRC initially awarded her ₹2 crore in compensation. After the Supreme Court remanded the matter for reassessment, the Commission reaffirmed the ₹2 crore award in April 2023. ITC Limited then challenged the decision before the apex court.
Justice Bindal, writing the 34-page verdict, observed:
“The damages cannot be awarded merely on presumptions or whims and fancies of the complainant… Especially when the claim is to the tune of crores of rupees, some trustworthy and reliable evidence has to be led.”
The Court criticised the NCDRC for relying solely on photocopies of documents submitted by Roy. It rejected the Commission’s view that the trauma suffered by the complainant justified dispensing with original documents.
The bench further noted that:
“Even if the Code of Civil Procedure may not be strictly applicable, the Commission has not assessed as to how the respondent suffered loss to the tune of ₹2,00,00,000.”
The Court found discrepancies in the documents presented and stressed that loss of professional opportunity or psychological impact must be quantified with “some tangible and cogent” proof.
While upholding the finding of deficiency in service, the Court allowed ITC Limited’s appeal in part and fixed the compensation at ₹25 lakh. It held that the original ₹2 crore figure was unsupported by admissible evidence and did not follow legal standards for awarding damages in consumer cases.
