Introduction
In a significant ruling on assessment of damages under consumer protection law, the Supreme Court recently reduced a ₹2 crore compensation awarded to model Aashna Roy for a defective haircut at the ITC Maurya hotel to ₹25 lakh. The judgment in ITC Limited v. Aashna Roy reiterates that compensation cannot be based on assumptions or exaggerated claims and must be supported by reliable and cogent evidence.
A Bench comprising Justices Rajesh Bindal and Manmohan emphasised that while deficiency in service may be established, awarding exorbitant damages requires proof of actual loss. The ruling is likely to influence future consumer disputes involving claims of reputational harm, professional loss, and mental trauma.
Background of the Dispute
The case dates back to April 2018 when Aashna Roy, a professional model, visited a salon at ITC Maurya in New Delhi for a haircut prior to an interview. She alleged that her hair was cut significantly shorter than instructed. According to her complaint, she later accepted complimentary treatment from the salon, which allegedly damaged her hair and scalp further.
Claiming harassment, humiliation, and loss of professional opportunities, Roy approached consumer forums seeking a written apology and compensation of ₹3 crore for deficiency in service.
In September 2021, the National Consumer Disputes Redressal Commission (NCDRC) found ITC guilty of deficiency in service and awarded ₹2 crore as compensation. This triggered a series of appeals culminating in the Supreme Court’s latest decision.
Earlier Supreme Court Intervention
This is the second time the matter reached the apex court. In February 2023, the Supreme Court upheld the finding that ITC had indeed committed deficiency in service but set aside the quantum of compensation. The Court observed that the record did not justify such a high award and directed the NCDRC to reassess damages after allowing both parties to present additional evidence.
Following the remand, Roy enhanced her claim to ₹5.2 crore, arguing that the haircut caused long-term professional setbacks, including lost modelling and film opportunities. Despite the remand directions, the NCDRC reaffirmed the ₹2 crore compensation with interest at 9% per annum, leading ITC to challenge the order again.
Supreme Court’s Key Observations
In its latest judgment, the Supreme Court stressed that damages cannot be granted merely on the basis of presumptions or subjective claims.
The Bench observed:
- Compensation running into crores must be supported by trustworthy and reliable evidence.
- Consumer fora cannot adopt a “thumb rule” while quantifying damages.
- Claims of professional loss require clear proof of actual opportunities lost.
The Court noted that the complainant relied largely on photocopies of emails, certificates, and communications to demonstrate loss of work. However, discrepancies in these documents and lack of corroborative evidence weakened her claim.
As a result, the Court concluded that the material on record did not justify the enormous compensation previously awarded.
Why the Compensation Was Reduced
The Supreme Court ultimately trimmed the compensation to ₹25 lakh — an amount that had already been released to Roy in earlier proceedings. The reduction was based on several legal considerations:
1. Lack of Concrete Proof of Financial Loss
The Court held that allegations of lost modelling contracts or film opportunities must be substantiated through credible evidence such as confirmed contracts, verified communications, or testimony from relevant parties.
2. Over-Reliance on Photocopies
The complainant’s reliance on photocopied documents without proper verification raised doubts about authenticity. The Court emphasised that documentary evidence must meet evidentiary standards, especially in high-value claims.
3. Distinction Between Deficiency and Damages
While deficiency in service was upheld, the Court clarified that establishing wrongdoing does not automatically entitle a complainant to massive compensation. The quantum must be proportionate to proven harm.
Consumer Law Principles Reinforced by the Judgment
The ruling reinforces several important principles under Indian consumer protection jurisprudence:
Evidence-Based Assessment of Damages
Consumer fora are required to assess damages on objective criteria rather than emotional or speculative claims. The Court’s reasoning underscores the importance of documentary proof in claims involving reputational or professional loss.
Limits on Exaggerated Compensation
The judgment signals judicial caution against inflated compensation claims that lack evidentiary backing. This could influence future cases where consumers seek large sums for non-pecuniary damages like mental agony or humiliation.
Balancing Consumer Rights and Business Liability
By maintaining the finding of deficiency while reducing damages, the Court struck a balance between protecting consumers and preventing disproportionate financial liability on service providers.
Implications for Service Providers and Professionals
The decision carries broader implications for the hospitality, beauty, and service industries:
- Businesses remain accountable for service lapses, even in seemingly minor matters like grooming services.
- However, they are protected against excessive compensation awards unless the claimant proves substantial and quantifiable loss.
- Professionals alleging career-related damages must maintain verifiable records of contracts and opportunities.
For consumers, the ruling serves as a reminder that emotional distress claims must be accompanied by credible evidence when seeking high-value compensation.
Legal Significance Beyond Consumer Law
Beyond the immediate context of a salon dispute, the judgment contributes to evolving jurisprudence on assessment of damages across civil litigation. Courts have increasingly emphasised proportionality, evidence-based reasoning, and restraint in awarding large sums without clear proof.
The Supreme Court’s remarks may also guide tribunals and commissions in avoiding speculative calculations and ensuring that compensation awards remain grounded in factual findings.
Conclusion
The Supreme Court’s decision in ITC Limited v. Aashna Roy marks an important precedent on quantifying damages in consumer disputes. By reducing the ₹2 crore compensation to ₹25 lakh, the Court reaffirmed that while deficiency in service must be addressed, monetary awards cannot rest on conjecture or exaggerated claims.
The ruling strengthens the principle that compensation under consumer law must reflect demonstrable harm rather than perceived or hypothetical losses. As consumer litigation continues to grow in India, this judgment is likely to serve as a benchmark for courts and tribunals dealing with high-value claims arising from personal and professional grievances.
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