The Supreme Court has substantially reduced the compensation awarded against ITC Limited in a consumer dispute arising from an alleged deficient haircut service at a luxury hotel salon, holding that huge damages cannot be granted without reliable and proven evidence of loss.
The Bench of Justice Rajesh Bindal and Justice Manmohan emphasized that proceedings before consumer forums are governed by the Consumer Protection Act, where strict rules of evidence may not apply, but decisions must still be based on credible material and principles of natural justice. Claims for very large compensation require trustworthy and reliable evidence of actual loss. Photocopies of documents, without proof of authenticity or examination of their authors, could not justify awarding crores in damages. Damages cannot be granted on presumptions or conjectures.
The bench restricted the compensation to Rs. 25 lakh, setting aside the National Consumer Disputes Redressal Commission’s (NCDRC) award of Rs. 2 crore.
The dispute arose after a customer, Aashna Roy, visited a beauty salon at ITC Maurya Hotel, New Delhi, in April 2018. Dissatisfied with the service, she filed a consumer complaint alleging deficiency in service.
In September 2021, the NCDRC found ITC guilty of deficiency in service and awarded compensation of ₹2 crore. ITC challenged the award before the Supreme Court.
In an earlier round of litigation, the Supreme Court upheld the finding of deficiency in service but set aside the compensation, observing that there was no material on record to justify such a high amount, and remitted the matter to the Commission to reassess compensation after allowing parties to lead evidence.
After remand, the Commission again awarded ₹2 crore with interest, leading to the present appeal.
The central question before the Supreme Court was whether compensation of crores of rupees could be awarded on the basis of photocopied documents and unproven claims of financial loss and mental trauma in proceedings under the Consumer Protection Act.
ITC argued that the respondent relied mainly on photocopies of documents whose authenticity was disputed. Original documents were not produced and witnesses were not examined to prove alleged modelling assignments, job offers, or medical claims. The company was denied the opportunity to cross-examine witnesses, violating principles of natural justice. There was no credible evidence showing that the haircut caused loss of employment or professional opportunities.
The respondent, appearing in person, contended that she suffered financial loss, mental trauma, and damage to her career prospects due to the incident. She argued that consumer forums should not insist on strict technicalities and should award fair compensation for the injury suffered.
The Court also noted that the respondent failed to establish a clear causal link between the alleged deficient service and the claimed financial losses or missed professional opportunities.
Allowing the appeal in part, the Supreme Court set aside the Rs. 2 crore compensation awarded by the NCDRC.
The court held that the respondent would be entitled only to the amount already released, i.e., Rs. 25 lakh deposited earlier during the proceedings.
Case Details
Case Title: ITC Limited Versus Aashna Roy
Case No.: CIVIL APPEAL NO.3318 of 2023
Date: 06/02/2026
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