Supreme Court Reduces Rs. 2 Crore NCDRC Compensation for bad haircut to Rs. 25 Lakh

The respondent, Aashna Roy, visited the beauty salon at the appellant’s ITC Maurya Hotel in New Delhi on April 12, 2018, for a haircut. Dissatisfied with the service, she filed a complaint before the National Consumer Disputes Redressal Commission (NCDRC) in July 2018, alleging deficiency in service and medical negligence.

The NCDRC, vide an order dated September 21, 2021, found the hotel guilty and awarded a staggering compensation of Rs. 2,00,00,000. After an initial round of litigation where the Supreme Court remitted the case back for fresh consideration, the NCDRC reaffirmed the Rs. 2 crore award on April 25, 2023. The appellant then moved the Supreme Court to challenge the quantum of this compensation.

Issue Before SC: Whether the NCDRC was justified in awarding a compensation of Rs. 2,00,00,000 for deficiency in service without a scientific or evidentiary assessment of the actual loss suffered by the respondent.

SC’s Decision: The Supreme Court of India partly allowed the appeal and substantially reduced the compensation awarded by the National Consumer Disputes Redressal Commission.

The Court held that although deficiency in service was established, the compensation awarded by the NCDRC was disproportionate and unsupported by credible evidence. The respondent had not produced original documents, medical evidence, or expert testimony to justify the magnitude of damages claimed.

The Bench reiterated that while the Code of Civil Procedure does not strictly govern consumer forum proceedings, compensation must still be determined on a rational, evidence-based assessment of loss and cannot rest on general observations alone.

The court modified the relief and reduced the compensation to Rs. 25 lakh, the amount already deposited by the appellant during the proceedings and released to the respondent.

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