'Catastrophic': Supreme Court warns against AI-generated fake citations in courts

The Supreme Court of India on Thursday, July 2, overturned the National Company Law Tribunal's (NCLT) and the National Company Law Appellate Tribunal's (NCLAT) judgments involving Essel Infraprojects Ltd, as the court found that they were generated by artificial intelligence (AI).

Senior counsel Madhavi Divan, who was representing Essel Infraprojects Ltd., brought the issue to the court's attention by pointing out that the NCLT had relied on several judgments that either did not exist or had information that was not in the original judgments.

A Bench of Justice PS Narasimha and Justice Alok Aradhe held that courts must adopt a "zero-tolerance" approach towards the use of artificial intelligence-generated precedents that have not been independently verified, according to media areports.

It is a misconduct on the part of an advocate to cite such judgments without verification. Equally, it is a serious lapse if a judge relies on such fake or hallucinated AI-generated material as precedents in support of the determination," the Bench said.

The apex court also declared that any decision influenced by fake AI-generated material cannot be treated as a valid judicial determination.

The Supreme Court made it clear that its decision should not be seen as being against the acceptable application of AI in the legal field. Rather, it stated that the issue was restricted to passing off AI-generated phony or hallucinogenic content as legitimate court precedents.

"It is also clarified that our judgment shall have no bearing on the rightful use of AI, but on the presentation or reliance on fake or hallucinated material as if it were a court precedent," the court said.

The Bench further said, "What about the Appellate Tribunal? The fake, non-existent judgments escaped scrutiny by the first statutory appellate tribunal. Today’s courts and tribunals implicitly trust lawyers when referring to precedents cited before them. Imagine the hardship of a situation in which the Court must verify the authenticity of each judgment cited by an advocate."

What was the case?

Jammu & Kashmir Bank had given a loan to a company, and Essel Infraprojects Ltd served as a corporate guarantor for that. Later, Jammu & Kashmir Bank started insolvency proceedings against the company. Essel Infraprojects suspended director Pooja Ramesh Singh had filed a Section 7 application contesting the company's admission into the corporate insolvency resolution procedure.

The insolvency plea was admitted by the Mumbai bench of the NCLT on 28 August 2024, and the NCLAT subsequently upheld that order on 11 September 2025.