New Delhi, July 2: The Supreme Court has annulled orders from the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) that relied on artificial intelligence (AI) generated fake, non-existent, and fictional judicial precedents.
The Supreme Court declared a ‘zero tolerance’ policy regarding the use of such material in judicial decisions, emphasizing that the inclusion of fake or fabricated content is entirely unacceptable.
A bench led by Justices P.S. Narasimha and Alok Aradhe stated that decisions based on AI-generated fictitious judicial examples cannot be deemed valid under the law. The court noted that such rulings undermine the rule of law.
“This is a case where the tribunal utilized AI-generated content to support its decision, which was entirely fictitious and did not exist,” the court remarked.
The bench annulled the NCLT’s order from August 28, 2024, and the NCLAT’s ruling from September 11, 2025. The court has referred the bankruptcy case back to the NCLT for a new hearing, instructing it to deliver a fresh ruling within two weeks.
The Supreme Court acknowledged that AI can assist in judicial processes but cannot replace human reasoning and understanding. “AI can be used as an aid in the decision-making process, but the final decision and full responsibility must remain with the judge. A human role must be maintained at every stage,” the court stated.
This decision arose from an appeal by Pooja Ramesh Singh, the suspended director of Essel Infra Projects Limited. She challenged the bankruptcy proceedings initiated by Jammu and Kashmir Bank Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC) in the Supreme Court.
During the hearing, senior advocate Madhavi Diwan, representing the appellant, pointed out that many judicial precedents cited by the NCLT were non-existent. She also noted that in some instances, paragraphs generated by AI were misrepresented as part of actual Supreme Court rulings.
After independently reviewing the historical judicial examples cited in the NCLT’s decision, the Supreme Court found that some references were to cases that did not exist. Additionally, some paragraphs were entirely fabricated and not recorded in any real decisions.
Justice P.S. Narasimha’s bench stated, “There is no dispute that the decisions cited by the NCLT did not actually exist. Furthermore, some AI-generated paragraphs were incorrectly presented as part of actual Supreme Court rulings.”
Expressing concern over the increasing use of AI in legal processes, the Supreme Court emphasized that courts must maintain full control when using AI in decision-making.
The court warned, “For those of us who resolve disputes and issue rulings, the use of AI-generated fake and fabricated information as judicial precedent is extremely dangerous. It is akin to a leak of methyl isocyanate gas, which is invisible but causes significant harm. By the time it is detected, substantial damage has already occurred. This not only affects the judicial process but also undermines the credibility of judicial decisions.”
The bench, led by Justice P.S. Narasimha, cautioned against relying on AI-generated content without verification. The court stated, “Courts should show no leniency in presenting, citing, or using AI-generated judicial examples without verification.”
It added, “Citing such decisions without verification is against a lawyer’s professional responsibility. Similarly, if a judge uses AI-generated fake or fabricated judicial examples to support a ruling, it would also be considered a serious lapse.”
The Supreme Court asserted, “We have no hesitation in stating that such a decision cannot be deemed valid under the law. If any ruling incorporates even a small amount of false or fabricated information, it should be annulled, as it affects the fairness and credibility of the judicial process.”
Highlighting the need for institutional safeguards, the Supreme Court directed the Bar Council of India (BCI) to form a committee. This committee will investigate cases where lawyers present AI-generated fake or fabricated legal examples in courts.
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