Supreme Court slashes faulty haircut compensation to Rs 25 lakh, says damages can't be based on whims

New Delhi: The Supreme Court has slashed the compensation from Rs 2 crore to Rs 25 lakh, awarded to a woman for a "faulty haircut" at a luxury hotel salon.

A bench comprising Justices Rajesh Bindal and Manmohan, in a judgement delivered on February 6, held that while "deficiency in service" was established, compensation in consumer disputes must be based on "material evidence" and not the "mere asking" or "whims and fancies" of the complainant.

"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," Justice Bindal, who authored the 34-page judgment, said.

The verdict said it was not a case where the National Consumer Disputes Redressal Commission was considering a small issue where compensation could be awarded by applying a thumb rule.

"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. Even the discrepancies in the photocopies produced on record by the respondent, as pointed out by the appellant, have been noticed … Thus, even after remand, respondent has not been able to make out a case for award of such huge compensation," it said.

The court held that while appraising the photocopies of the documents, the apex consumer panel committed an error in awarding a compensation of Rs 2 crore.

"The observation made by the Commission that because of the trauma suffered by the respondent, she may not have maintained the originals of the documents produced before the Commission, hence, reliance could be placed on mere photocopies, cannot be a justification for awarding such a huge compensation," the verdict read.

Even if the photocopies were to be produced, there are other ways and means to justify the claim made on that basis, it said.

"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 Rs 2,00,00,000/-. General discussion in the impugned judgment may not justify the same," it said.

In April 2018, the respondent, Aashna Roy, a management professional, visited a salon at the ITC Maurya Hotel in Delhi.

Roy alleged that the stylist cut her hair much shorter than requested, causing her significant mental trauma and the loss of lucrative modelling assignments and career opportunities.

The NCDRC initially awarded her Rs 2 crore in compensation.

After an earlier round of litigation where the top court asked for a reassessment of the amount, the commission reiterated the Rs 2 crore award in April 2023.

ITC Limited challenged this second award before the apex court.