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

Date of the Judgment: 7 February 2023

Citation: 2023 INSC 1002

Judges: Justices Aniruddha Bose and Vikram Nath

Can a consumer claim exorbitant compensation for a service deficiency without providing substantial evidence? The Supreme Court of India recently addressed this question in a case involving a faulty haircut at a luxury hotel. The court examined the principles of awarding compensation under the Consumer Protection Act, 1986, particularly when claims involve emotional distress and loss of potential earnings. The judgment was delivered by a two-judge bench comprising Justices Aniruddha Bose and Vikram Nath, with the opinion authored by Justice Vikram Nath.

Case Background

On April 12, 2018, Aashna Roy visited the salon at the ITC Maurya Hotel in New Delhi for a hair styling session. She had a specific request for long flicks/layers covering her face in the front and at the back and a 4-inch straight hair trim from the bottom. Ms. Christine, the assigned hair dresser, instead of following the instructions, chopped off her hair to just 4 inches from the top, barely touching her shoulders. Roy immediately complained to the salon manager, Mr. Gurpreet Acharya, who did not raise any bill due to the complaint. Roy alleged that this faulty haircut led to humiliation, shattered her modeling career, and caused severe depression. She also claimed that her hair was being sold by the salon. Following this, Roy complained to the General Manager of the salon, Mr. Zubin Songadwala, and the CEO of ITC Limited, Mr. Dipak Haksar, but received no satisfactory response. The salon offered her hair extension services and free treatment, which she accepted. However, a subsequent hair treatment on May 3, 2018, resulted in further damage to her hair and scalp due to the excessive use of ammonia.

Timeline:

Course of Proceedings

Aashna Roy filed a complaint before the National Consumer Disputes Redressal Commission (NCDRC), alleging deficiency in service and seeking Rs. 3 crores in compensation. The NCDRC initially directed the deletion of Mr. Yogesh Deveshwar’s name from the complaint and rejected the plea to implead Mr. Sanjeev Puri. The NCDRC found that the length of Roy’s hair was shortened contrary to her instructions, that her looks changed due to faulty hairstyling, and that there was negligence on the part of ITC in providing hair treatment. The NCDRC awarded a lumpsum compensation of Rs. 2 crores, relying on the judgment in Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668]. ITC appealed this order before the Supreme Court.

Legal Framework

The case is primarily governed by the Consumer Protection Act, 1986. The relevant provision is Section 23 of the Consumer Protection Act, 1986, which deals with appeals to the Supreme Court. The judgment also references Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668], which is a case on medical negligence and compensation. The NCDRC relied upon this case to determine the compensation payable to the respondent.

Arguments

Appellant (ITC Limited)’s Arguments:

• The appellant argued that the respondent was not a consumer as the services rendered were free of charge.
• They contended that the claim for compensation was highly exorbitant and lacked documentary evidence.
• The appellant also raised an objection regarding pecuniary jurisdiction.
• On merits, the appellant defended that there was no deficiency in service and that the compensation awarded was excessive.

Respondent (Aashna Roy)’s Arguments:

• The respondent argued that the faulty haircut and subsequent hair treatment caused her significant mental trauma, humiliation, and loss of career prospects.
• She claimed that her modeling career was shattered due to the change in her appearance.
• She also contended that she suffered severe mental breakdown and trauma due to the negligence in the services provided to her.
• The respondent argued that she lost her job as a result of the incident.
• She sought a written apology from the management and compensation of Rs. 3 crores for the damages suffered.

Innovativeness of the argument: The respondent’s argument was innovative in the sense that it sought to quantify the emotional and career-related damages arising from a seemingly minor service deficiency, highlighting the importance of personal appearance in certain professions.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues:

1. Whether there was a deficiency in service on the part of the appellant?
2. If there was a deficiency in service, what would be an adequate compensation?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

• Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668] – Supreme Court of India. This case was relied upon by the NCDRC to determine compensation but was not discussed by the Supreme Court in detail.

Judgment

How each authority was viewed by the Court?

• Charan Singh vs. Healing Touch Hospital & Ors. [(2000) 7 SCC 668]: The Supreme Court did not explicitly discuss the ratio of this case in its judgment. However, it acknowledged that the NCDRC had relied on it. The Supreme Court did not find any fault with the reliance but found the quantification to be excessive.

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 respondent’s claim for compensation. While the court acknowledged the deficiency in service and the emotional distress suffered by the respondent, it emphasized that compensation must be based on concrete evidence, not just on claims. The court also highlighted that the NCDRC had not discussed any material evidence to quantify the compensation. The Court was of the view that the NCDRC had made the award based on 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.

Logical Reasoning

Judgment

The Supreme Court set aside the NCDRC’s order awarding Rs. 2 crores as compensation. The Court remitted the matter back to the NCDRC, giving the respondent an opportunity to lead evidence to substantiate her claim for Rs. 3 crores. The Court emphasized that compensation must be based on material evidence and not on mere asking. The Court also directed that if the respondent leads evidence, the appellant should be given adequate right of rebuttal. The NCDRC was instructed to take a fresh decision on the issue of quantification of compensation based on the material placed on record.

The Court stated, “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 Court further observed, “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.”

The Court also noted, “In the facts of the case, we are of the view that the respondent if she has material to substantiate her claim may be given an opportunity to produce the same. Once deficiency in service is proved then the respondent is entitled to be suitably compensated under different heads admissible under law. Question is on what basis and how much.”

Key Takeaways

• Compensation under the Consumer Protection Act, 1986, must be based on material evidence.
• Claims for emotional distress and loss of income must be substantiated with proof.
• Consumer forums should not award excessive compensation without adequate evidence.
• The importance of hair in a woman’s life and that it could be an asset for building a career in modelling and advertising industry cannot be the sole basis for quantification of compensation.

Directions

The Supreme Court directed the appellant to transmit the deposited amount of Rs. 25 lakhs along with accrued interest to the NCDRC within two weeks. The NCDRC was instructed to pass appropriate orders with respect to the said amount while deciding the matter afresh.

Development of Law

The ratio decidendi of this case is that while deficiency in service is a valid ground for compensation under the Consumer Protection Act, 1986, the quantum of compensation must be substantiated with material evidence and cannot be based on mere claims or assumptions. This judgment clarifies that consumer forums must not award excessive compensation without proper evidence, emphasizing the need for a balanced and evidence-based approach in determining compensation for service deficiencies.

Conclusion

The Supreme Court’s judgment in ITC Limited vs. Aashna Roy highlights the importance of evidence in consumer compensation cases. While acknowledging the deficiency in service, the court emphasized that compensation must be substantiated with material evidence and not on mere claims. The case was remitted back to the NCDRC for fresh consideration based on any evidence the respondent may present.