Supreme Court Revisits Compensation in Consumer Case: ITC vs. Aashna Roy (2023)

Date of the Judgment: 7th February 2023. Citation: [Not Available in Source]. Judges: Justice Aniruddha Bose and Justice Vikram Nath. Can a consumer court award a substantial compensation without sufficient evidence? The Supreme Court of India recently addressed this question in a case concerning a claim of deficiency in service at a high-end salon. The court examined the National Consumer Disputes Redressal Commission’s (NCDRC) decision to award a compensation of Rs. 2 crores and found that it lacked sufficient evidentiary basis. This judgment, authored by Justice Vikram Nath, highlights the importance of providing material evidence to justify compensation claims in consumer disputes. The bench comprised of Justice Aniruddha Bose and Justice Vikram Nath.

Case Background

On April 12, 2018, Ms. Aashna Roy visited the salon at Hotel ITC Maurya, New Delhi, seeking a haircut before an important interview. She specifically requested a stylist named Ms. Alem, who had previously styled her hair. However, Ms. Alem was unavailable, and Ms. Christine was assigned to her. Despite her dissatisfaction with Ms. Christine’s previous services, Ms. Roy accepted her services after the salon manager assured her of Ms. Christine’s improved skills.

Ms. Roy instructed Ms. Christine to give her “long flicks/layers covering her face in the front and at the back and 4-inch straight hair trim from the bottom.” While styling her hair, Ms. Christine took more than an hour, which caused Ms. Roy to question the delay. Ms. Christine responded that she was giving her “the London Haircut.” Upon completion, Ms. Roy was shocked to find that Ms. Christine had chopped off her hair, leaving only 4 inches from the top, barely reaching her shoulders. This was in direct contradiction to her instructions.

Ms. Roy immediately complained to the salon manager, Mr. Gurpreet Acharya. The manager did not raise a bill due to her complaint. Subsequently, Ms. Roy also complained to the General Manager of the salon, Mr. Zubin Songadwala, and the Chief Executive Officer of ITC Limited, Mr. Dipak Haksar. She alleged that her hair was being sold by the salon. The salon offered her hair extension services and free treatment, which she accepted.

On May 3, 2018, Ms. Roy returned for hair treatment. Mr. Vicky, under the supervision of Ms. Alem, was assigned to do the treatment. During the treatment, excessive ammonia was used, which severely damaged her hair and scalp. She experienced irritation and burning sensations. She complained again, but the staff was rude and disrespectful. Ms. Roy felt that her complaints to the ITC Group of Hotels were futile.

As a result of these incidents, Ms. Roy claimed that she suffered humiliation, embarrassment, a shattered modeling career, and depression. She filed a complaint before the NCDRC, seeking a written apology and compensation of Rs. 3 crores for harassment, mental trauma, loss of career, and future prospects.

Timeline

Course of Proceedings

The NCDRC issued notices to the opposite parties. Mr. Yogesh Deveshwar, the non-executive Chairman of ITC Limited, argued that he was wrongly impleaded as he was not involved in the day-to-day operations of the company. The appellant, ITC Limited, raised several objections, including that Ms. Roy was not a consumer as the services were free of charge, the compensation claim was exorbitant, and the complaint lacked pecuniary jurisdiction. Both parties presented evidence through affidavits, photographs, CCTV footage, and social media chats.

The NCDRC directed the deletion of Mr. Yogesh Deveshwar’s name and rejected the application to implead Mr. Sanjeev Puri, the subsequent Chairman of ITC Limited. The NCDRC found that the length of Ms. Roy’s hair was shortened contrary to her instructions and that this faulty styling changed her looks. The NCDRC also found negligence on the part of the appellant in providing hair treatment, which caused damage to her scalp.

The NCDRC relied on the Supreme Court’s judgment in Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668] to emphasize the importance of hair for women and the emotions attached to it. The NCDRC noted that Ms. Roy was a model for hair products and that the deficiency in service caused her to lose expected assignments, suffer a huge loss, and experience a mental breakdown. Consequently, the NCDRC awarded a lumpsum compensation of Rs. 2 crores.

Legal Framework

This case is governed by the Consumer Protection Act, 1986. The specific provisions of the Act are not mentioned in the judgment. However, the case revolves around the concept of “deficiency in service” as defined under the Act. The NCDRC’s power to award compensation for deficiency in service is also relevant.

Arguments

Appellant’s Arguments (ITC Limited):

• The appellant doubted the status of the respondent as a consumer, since the services were rendered free of charge.
• The claim for compensation was highly exorbitant.
• No documentary evidence was provided to support such a huge claim.
• The complaint deserved to be dismissed for want of pecuniary jurisdiction.
• The appellant also defended itself on merits, arguing that there was no deficiency in service.

Respondent’s Arguments (Aashna Roy):

• The respondent argued that the hair dresser had chopped off her hair contrary to her instructions.
• The faulty haircut led to a change in her looks and caused her humiliation and embarrassment.
• The respondent’s career in the world of modeling was shattered.
• She went into a state of depression.
• The respondent suffered damage to her hair and scalp due to the faulty hair treatment.
• She lost her job due to the mental trauma she suffered.
• She sought a written apology from the management and compensation of Rs. 3 crores for harassment, mental trauma, loss of career, loss of income, and loss of future prospects.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issues that the Court addressed were:

1. Whether there was a deficiency in service by the appellant.
2. Whether the compensation awarded by the NCDRC was justified.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authority:

• Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668] – Supreme Court of India. This case was cited by the NCDRC to emphasize the importance of hair in a woman’s life and the emotions attached to it. The Supreme Court did not explicitly discuss the ratio of this case in its judgment.

Judgment

How each authority was viewed by the Court?

• The Court referred to Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668]* as a basis for the NCDRC’s understanding of the importance of hair for women. However, the Court did not discuss the case’s ratio or how it applied to the facts of the case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the lack of material evidence to support the compensation awarded by the NCDRC. The Court emphasized that while deficiency in service was established, the quantification of compensation had to be based on concrete evidence, not just claims. The Court noted that the NCDRC had discussed the importance of hair in a woman’s life and its potential for a career in modeling and advertising but stressed that the quantification of compensation must be based on material evidence.

The Court’s sentiment was that while the respondent’s suffering was acknowledged, the compensation had to be justified with evidence. The Court repeatedly asked the respondent to provide evidence regarding her job, emoluments, past or future modeling assignments, and the interview for which she sought the haircut. Her failure to do so weighed heavily in the Court’s decision to set aside the compensation.

The Court also expressed concern that the respondent, who was appearing in person, may not have been able to comprehend how to substantiate her claim without legal assistance. Despite offering free legal aid, the respondent declined it.

Logical Reasoning:

The Court considered alternative interpretations but rejected them due to the lack of evidence. The Court emphasized that while the respondent’s suffering was acknowledged, the compensation needed to be substantiated with evidence. The Court’s final decision was to set aside the NCDRC’s order and remit the matter for fresh consideration, allowing the respondent to present evidence to support her claim.

The Supreme Court stated that the NCDRC fell in error by awarding compensation to the tune of Rs.2 crores without there being any material to substantiate and support the same or which could have helped the NCDRC to quantify the compensation. The Court stated that it was of the view that the respondent if she has material to substantiate her claim may be given an opportunity to produce the same. The Court also stated that once deficiency in service is proved then the respondent is entitled to be suitably compensated under different heads admissible under law. The Court stated that the question is on what basis and how much. The Court left this quantification to the wisdom of the NCDRC based upon material if any that may be placed before it by the respondent.

The Court quoted the following from the judgment:

• “From a perusal of the impugned order of the NCDRC we do not find reference to or discussion on any material evidence to quantify the compensation.”
• “In the absence of any material with regard to her existing job, the emoluments received by her, any past, present or future assignments in modeling which the respondent was likely to get or even the interview letter for which the respondent alleges she had gone to the saloon to make herself presentable, it would be difficult to quantify or assess the compensation under these heads.”
• “The NCDRC discussed regarding the importance of hair in a woman’s life and also that it could be an asset for building a career in modelling and advertising industry but then quantification of compensation has to be based upon material evidence and not on the mere asking.”

There were no dissenting opinions in this case. The judgment was delivered by a bench of two judges, with Justice Vikram Nath authoring the opinion.

Key Takeaways

• Compensation in consumer disputes must be based on material evidence, not just claims.
• Consumers seeking compensation must provide concrete evidence of their losses, such as job details, income, and contracts.
• Consumer courts must carefully assess the evidence before awarding compensation.
• The judgment highlights the importance of proper documentation and evidence in consumer dispute cases.
• The case underscores the need for consumers to seek legal assistance to present their cases effectively.

Directions

The Supreme Court set aside the NCDRC’s order awarding Rs. 2 crores as compensation. The matter was remitted to the NCDRC to give an opportunity to the respondent to lead evidence with respect to her claim of Rs. 3 crores. The NCDRC was directed to give the appellant an adequate right of rebuttal. The NCDRC was directed to take a fresh decision on the issue of quantification of compensation based on the material placed on record. The Court also directed that the amount of Rs. 25 lakhs, which the appellant had deposited with the Registry, should be transmitted to the NCDRC.

Development of Law

The ratio decidendi of this case is that while deficiency in service is a valid ground for compensation, the quantification of such compensation must be based on material evidence. This judgment reinforces the principle that consumer courts cannot award compensation based on mere claims without supporting evidence. It also clarifies the importance of proper documentation and evidence in consumer dispute cases.

Conclusion

The Supreme Court’s judgment in ITC Limited vs. Aashna Roy underscores the importance of providing material evidence to support compensation claims in consumer disputes. While acknowledging the deficiency in service and the respondent’s suffering, the Court emphasized that compensation cannot be awarded without concrete evidence. The matter was remitted to the NCDRC for a fresh decision, allowing the respondent to present evidence to substantiate her claim. This case serves as a reminder that consumer courts must rely on evidence-based assessments when determining compensation.

Category

Parent Category: Consumer Protection Act, 1986

Child Categories: Deficiency in Service, Compensation, Consumer Dispute, National Consumer Disputes Redressal Commission

Parent Category: Consumer Protection Act, 1986

Child Categories: Section 23, Consumer Protection Act, 1986

FAQ

Q: What was the case about?

A: The case was about a consumer dispute where a woman, Ms. Aashna Roy, claimed deficiency in service against ITC Limited for a faulty haircut and hair treatment at their salon. She sought compensation for the losses she suffered.

Q: What did the Supreme Court decide?

A: The Supreme Court set aside the compensation of Rs. 2 crores awarded by the NCDRC, stating that it lacked sufficient evidence. The court remitted the matter back to the NCDRC, allowing Ms. Roy to provide evidence to support her claim.

Q: What is “deficiency in service”?

A: “Deficiency in service” refers to any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance that is required to be maintained by a service provider under the law.

Q: What kind of evidence should consumers provide to claim compensation?

A: Consumers should provide concrete evidence of their losses, such as job details, income, contracts, medical reports, and any other relevant documents that support their claim.

Q: Can a consumer court award compensation without evidence?

A: No, consumer courts cannot award compensation without sufficient evidence. The compensation must be based on material evidence and not just claims.

Q: What does it mean when the Supreme Court remits a matter?

A: When the Supreme Court remits a matter, it sends the case back to the lower court or tribunal for reconsideration, usually with specific instructions or directions.

Q: What should I do if I face a deficiency in service?

A: If you face a deficiency in service, you should first complain to the service provider. If that doesn’t resolve the issue, you can approach the consumer court with all relevant evidence to support your claim.