Supreme Court Declares AI-Generated Fake Precedents a Threat to Justice, Sets Aside Orders Based on Hallucinated Citations
In a landmark judgment on the use of artificial intelligence in the legal system, the Supreme Court has held that reliance on AI-generated fake or hallucinated judicial precedents fundamentally vitiates the adjudicatory process and renders such decisions unsustainable in law. The Court set aside the orders of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) after finding that they had relied on non-existent case law generated through artificial intelligence.
A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe observed that the use of fabricated precedents strikes at the very foundation of the justice delivery system. In a strongly worded judgment, the Court likened AI-generated fake citations to the release of methyl isocyanate, describing them as “invisible, insidious, and catastrophic by the time anyone notices.” It warned that such material contaminates judicial reasoning and undermines the rule of law.
The case arose from insolvency proceedings involving Essel Infraprojects Ltd., where the NCLT had relied on several judicial precedents that, upon scrutiny, were found to be entirely fictitious. The Supreme Court noted that these citations had apparently been generated using AI tools and were subsequently reproduced in the tribunal’s judgment without verification. The NCLAT also failed to detect the error while affirming the NCLT’s decision.
Setting aside both tribunal orders, the apex court ruled that a judgment founded on fake or non-existent precedents is “no decision in the eyes of law” and must be quashed. The matter has been remanded to the NCLT for fresh adjudication, with directions to decide the case independently and without being influenced by the fabricated authorities cited earlier.
The Supreme Court also issued a stern warning to the legal fraternity. It held that advocates who cite AI-generated or hallucinated judgments without verification may be guilty of professional misconduct, while judges who rely on such material commit a serious judicial lapse. Calling for a “zero-tolerance” approach, the Bench emphasized that artificial intelligence can assist legal research but can never replace human diligence, verification and judicial reasoning.
Recognising the growing use of AI in legal practice, the Court directed the Bar Council of India to examine the issue and formulate appropriate guidelines governing the use of AI-generated content in court proceedings, including disciplinary consequences for advocates who submit fabricated authorities as genuine precedents. The judgment underscores that while technological tools may improve efficiency, every legal citation must be independently verified before being relied upon in judicial proceedings.
The ruling is widely regarded as the Supreme Court’s strongest warning yet on the misuse of generative AI in the justice system. It establishes that while AI may serve as an aid to legal professionals, responsibility for the accuracy and authenticity of legal authorities rests entirely with lawyers and adjudicating authorities, reinforcing that human oversight remains indispensable in the administration of justice.
