Judgments Tainted by AI Hallucinations Are No Judgments at All

Case Snapshot

• Case Name: Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd. & Anr.

• Citation: 2026 INSC 668

• Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe

• Date of Judgment: July 2, 2026

• Area of Law: Insolvency and Bankruptcy Code, 2016; Artificial Intelligence in Adjudication; Judicial Integrity

Judgment in Brief

The Supreme Court set aside the judgments of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) because the NCLT relied on fake, non-existent, and AI-generated "hallucinated" precedents to support its findings. The Court declared that any judicial decision based on AI-generated fake or hallucinated material is "no decision at all" and amounts to subversion of the rule of law. The Court adopted a zero-tolerance policy towards the use of unverified AI-generated material in judicial proceedings, holding that it is a misconduct on the part of advocates to cite such material and a serious lapse on the part of judges to rely on it. The matter was remanded to the NCLT for fresh adjudication on merits, with directions to maintain status quo pending disposal.

Relevant Facts

• The appellant was a suspended director of Essel Infraprojects Ltd. (EIL), which had executed a corporate guarantee for loans availed by Pan India Utilities Distribution Company Ltd. (PIUDCL) from Jammu and Kashmir Bank Ltd.

• PIUDCL defaulted, and the Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, before the NCLT seeking initiation of the corporate insolvency resolution process against EIL.

• The NCLT admitted the application on August 28, 2024, appointing an Interim Resolution Professional and declaring a moratorium.

• The appellant appealed to the NCLAT, contending that the guarantee had been relinquished and that the corporate debtor's liabilities had been transferred to another company through a demerger and amalgamation.

• The NCLAT dismissed the appeal, affirming the NCLT's findings.

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