Supreme Court Cuts Compensation Order Against ITC Maurya From ₹2 Crore to ₹25 Lakh In Botched Haircut Case

The Supreme Court on Friday clarified that compensation running into crores of rupees cannot be awarded on “presumptions or whims and fancies” of a complainant and must be founded on “trustworthy and reliable evidence”.

The clarification came while the court was examining a consumer dispute arising from services rendered at the ITC Maurya hotel in New Delhi, where the complainant had alleged deficiency in service relating to a haircut and sought compensation running into crores of rupees.

A bench of Justices Rajesh Bindal and Manmohan emphasised that consumer fora cannot grant high-value compensation without reliable evidence to establish actual loss.

“The damages cannot be awarded merely on presumptions or whims and fancies of the complainant. To make out a case for award of damages, especially when the claim is to the tune of crores of rupees, some trustworthy and reliable evidence has to be led. ” the court observed.

The dispute arose from an incident on April 12, 2018, when Aashna Roy visited a beauty salon at the ITC Maurya hotel in New Delhi for a haircut. Alleging dissatisfaction and deficiency in service, she filed a consumer complaint in July 2018.

Roy claimed that the haircut caused severe professional setbacks, including loss of employment opportunities, modeling assignments, and mental trauma.

In September 2021, the National Consumer Disputes Redressal Commission (NCDRC) held the hotel guilty of deficiency in service and medical negligence and awarded her compensation of Rs 2 crore.

ITC Ltd. challenged the award before the Supreme Court, contending that the compensation was unsupported by evidence. In an earlier round of litigation, the Supreme Court declined to interfere with the finding of deficiency in service but set aside the compensation and remitted the matter to the NCDRC for fresh consideration, noting the absence of material justifying such a high claim.

After the matter was remanded, the complainant enhanced her claim to Rs 5.20 crore and relied primarily on photocopies of emails, certificates, and medical records. ITC denied the authenticity of these documents and sought permission to cross-examine the complainant and the authors of the documents.

Despite this, the NCDRC again awarded Rs 2 crore as compensation.

Setting aside this approach, the Supreme Court held that when a claim for compensation runs into crores of rupees, the complainant must clearly establish the actual loss suffered due to the deficiency in service. The court said such loss could not be proved “merely by producing photocopies of the documents,” particularly when discrepancies in those documents had been specifically pointed out by the appellant.

“Claim of compensation was for crores of rupees, for which some loss suffered by the respondent because of deficiency in service was required to be established. This could not be established by merely producing photocopies of the documents,” the court said.

The court accordingly restricted the compensation payable to Rs 25 lakh, which had already been released earlier, and set aside the balance amount.