India Supreme Court Sets Aside AI Hallucinated Judgments

The Supreme Court of India set aside judgments from the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) after determining the lower bodies relied on fake and "hallucinated" legal precedents generated by artificial intelligence. The ruling emerged from insolvency proceedings initiated by Jammu and Kashmir Bank Ltd. against Essel Infraprojects Ltd.

Justices PS Narasimha and Alok Aradhe declared that any judicial decision based on fabricated material is "no decision in the eyes of the law" and constitutes a subversion of the rule of law. While the court acknowledged that AI can assist legal processes, it emphasized that human decision-makers must maintain "absolute and total control" over judicial reasoning. The court further labeled the submission of unverified AI precedents as professional misconduct for advocates and a "serious lapse" for judges.

As a result of the ruling, the Supreme Court restored the insolvency proceedings to the NCLT for fresh adjudication. To prevent future occurrences, the court directed the Bar Council of India to form a committee to establish guiding principles and disciplinary actions for lawyers who submit fabricated AI material in court.