The court observed that compensation claims running into crores require trustworthy evidence demonstrating actual loss.
New Delhi: The Supreme Court, on Friday (February 6), substantially reduced the compensation awarded to a woman who alleged deficiency in service by a luxury hotel salon, holding that damages cannot be granted on presumptions without reliable evidence. A bench of Justices Rajesh Bindal and Manmohan modified the National Consumer Disputes Redressal Commission’s order that had awarded Rs 2 crore, restricting the relief to Rs 25 lakh already released to the complainant.
The judgment, authored by Justice Bindal, came in ITC Limited v Aashna Roy, where the hotel chain had challenged the quantum of compensation granted after a haircut at its ITC Maurya hotel in New Delhi triggered prolonged consumer litigation.
The dispute traces back to April 12, 2018, when the respondent visited the salon for a haircut and later approached the national commission alleging deficiency in service and medical negligence. The commission initially found the hotel guilty and awarded Rs 2 crore in compensation.
In an earlier round, the Supreme Court upheld the finding of deficiency but set aside the compensation, observing that no material had been placed on record to justify such a large claim and remitted the matter for fresh assessment.
After remand, the complainant enhanced her claim to Rs 5.2 crore and produced documents to demonstrate financial loss and emotional trauma. The commission nevertheless reaffirmed the Rs 2 crore award with interest at nine percent per annum, prompting the hotel to return to the Supreme Court.
Before the court, the appellant argued that the commission relied on photocopies whose authenticity was disputed, while applications seeking production of originals and permission to cross-examine the complainant were not considered. It contended that the alleged losses from modelling assignments, employment prospects, and psychological harm were unsupported by admissible evidence.
The complainant, appearing in person, maintained that the faulty haircut derailed a promising career and caused mental agony, urging the court not to allow technicalities to defeat consumer justice. Among other documents, she had submitted pay slips from AMC Marketing Research Associates showing her salary as senior director, emails purportedly offering her senior positions at Mahindra, certificates from modelling agencies claiming she had assignments worth Rs 50-60 lakh, and a doctor's certificate stating she suffered mental trauma and depression.
ITC filed a detailed rebuttal on March 16, 2023 denying all documents produced by Roy. The company argued that most documents were dim, illegible photocopies without any authentication. ITC also filed applications seeking production of original documents and permission to cross-examine Roy, but the commission awarded the same Rs 2 crore compensation without addressing these applications.
The Supreme Court found multiple deficiencies in the evidence produced by Roy. The court noted that her pay slips for April and May 2018 showed she continued working at the same salary before and after the alleged faulty haircut, contradicting her claim of job loss. The emails regarding job offers at Mahindra contained no specific details about salary or formal offers , and provided no evidence linking any lost opportunity to the haircut.
Regarding modelling assignments, the court observed that certificates from Glitz Modelling and Production Private Limited were undated, contained no monetary details, and their authenticity was questionable. A certificate dated December 11, 2017 offering her a film role for Rs 60 lakh predated the haircut by four months, establishing no causal connection. Another certificate from February 2, 2018 regarding a Rs 50 lakh haircare modelling assignment was on plain paper without letterhead and lacked agreed terms.
The court noted that photographs from alleged modelling assignments were undated with no proof of payment. A certificate dated February 13, 2023 claiming Roy had worked in a short film titled "The Japanese Wife" was contradicted by Internet Movie Database (IMDB) records which did not list her name in the cast.
Examining the record, the bench reiterated that while consumer forums are not strictly bound by the Indian Evidence Act, they must adhere to principles of natural justice. The court noted that none of the authors of the documents relied upon by the complainant had been examined and no steps were taken to prove their authenticity.
The judges observed that compensation claims running into crores require trustworthy evidence demonstrating actual loss. Producing photocopies without substantiating them did not inspire confidence, particularly when discrepancies had been highlighted by the appellant.
“The damages cannot be awarded merely on presumptions or whims and fancies of the complainant,” the court said, emphasising that quantification must be based on material evidence rather than mere assertions.
The court cited established precedents that when documents are denied by the opposing party, their authenticity must be proved through proper procedures such as examining the authors or issuing commissions for witness examination.
The court observed that Roy produced only photocopies without summoning any document authors or obtaining commission for witness examination. She did not enter the witness box hers elf to testify under oath, depriving ITC of any opportunity for cross-examination. The Commission's reasoning that Roy may not have maintained original documents due to trauma could not justify awarding such massive compensation based solely on unverified photocopies.
The judgment noted that Roy, who holds a post-graduate degree from IIM Calcutta and a diploma in mass communication, had refused free legal aid offered by the court and chose to represent herself. However, this could not excuse the lack of proper evidence to substantiate her extraordinary claims.
The court ultimately held that the only reliable amount established on record was the Rs 25 lakh already deposited by ITC during the first appeal, which the commission had directed to be released to Roy. The Supreme Court restricted her total compensation to this amount, effectively reducing the award by 87.5 percent from the Rs 2 crore granted by the commission.
Finding that the commission failed to assess how the complainant suffered losses to the extent of Rs 2 crore, the court held the award unjustified.
The ruling reinforces a key evidentiary threshold in consumer jurisprudence: even where deficiency in service is established, large monetary awards must be anchored in demonstrable harm.