The Supreme Court reduced a Rs.2 crore compensation awarded by the National Consumer Disputes Redressal Commission (NCDRC) to a woman to Rs.25 lakh, stating that high-value damages in consumer disputes require reliable evidence to justify such awards
The Supreme Court reduced a Rs.2 crore compensation awarded to a woman by the National Consumer Disputes Redressal Commission (NCDRC) to Rs.25 lakh, stating that high-value damages in consumer disputes require reliable evidence.
A bench consisting of Justices Rajesh Bindal and Manmohan delivered the judgment on February 6, asserting that while there was a clear deficiency in service due to a mishandled haircut at a luxury hotel salon, the NCDRC had erred by basing its compensation on assumptions and unverified documents.
In April 2018, Aashna Roy, a management professional, visited the salon at ITC Maurya Hotel in Delhi. She claimed that the stylist cut her hair much shorter than she requested, causing her mental distress and loss of lucrative modeling opportunities.
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Initially, the NCDRC awarded her Rs.2 crore in compensation. However, after the Supreme Court remanded the matter for reevaluation, the Commission reaffirmed the Rs.2 crore award in April 2023.
ITC Limited subsequently challenged this decision before the apex court.
Justice Bindal, in a 34-page verdict, noted,
“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 criticized the NCDRC for relying solely on photocopies of documents submitted by Roy and rejected the argument that her trauma justified bypassing original documents.
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The bench further commented that even if the Code of Civil Procedure was not strictly applicable, the Commission failed to evaluate how the respondent suffered losses amounting to Rs.2 crore.
The Court identified inconsistencies in the presented documents and emphasized that loss of professional opportunities and psychological effects must be substantiated with some tangible and cogent evidence.
While upholding the finding of deficiency in service, the Court partly granted ITC Limited’s appeal and set the compensation at Rs.25 lakh, stating that the original Rs.2 crore figure lacked admissible evidence and did not adhere to the legal standards for awarding damages in consumer cases.
