Supreme Court: Citing AI Fake Precedents is Misconduct, Judgments Void

In a landmark and pivotal ruling, the Supreme Court of India has issued a stern warning against the uncritical use of Artificial Intelligence (AI) in legal proceedings, unequivocally declaring that citing unverified AI-generated 'fake' or 'hallucinated' judicial precedents constitutes professional misconduct for advocates and renders any judgment based on such material null and void. The decision, handed down on Thursday, July 2, 2026, by a bench comprising Justices P.S. Narasimha and Alok Aradhe, underscored the paramount importance of maintaining the integrity and sanctity of the judicial process. The Supreme Court's pronouncement came while setting aside orders passed by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). These tribunals had, in an insolvency dispute concerning Essel Infraprojects Ltd., relied on purported judicial precedents that were later found to be entirely non-existent, fabricated, or contained wrongly attributed paragraphs, likely generated by AI tools. The apex court's independent verification confirmed that several citations in the NCLT's judgment, such as 'ICICI Bank Ltd vs Urban Infrastructure Real Estate Ltd (2019) 16 SCC 528' and 'Sarbjit Singh vs Union Bank of India (2022) 7 SCC 464', were fictitious. Even more concerning was the fact that these errors had escaped scrutiny at the appellate level, with the NCLAT affirming the NCLT's flawed order. Justice Narasimha, delivering the judgment, articulated a 'zero-tolerance' policy, stating that it is 'necessary for Courts to adopt a zero-tolerance mode for producing, citing or using AI-generated precedents without verification.' The Court emphasized that it is 'misconduct on the part of an advocate to cite such judgments without verification.' Extending this accountability, the bench also cautioned that 'it is a serious lapse if a judge relies on such a fake or hallucinated AI-generated material as precedents in support of the determination.' The Supreme Court was unequivocal in its stance that any judicial decision tainted by fabricated or hallucinated precedents is 'no decision in the eyes of the law, irrespective of whether such material had a direct or indirect bearing on the decision-making.' Such decisions, the Court asserted, 'are to be set aside even if an iota of fake or hallucinated material enters the decision-making process, as it would violate the sanctity of adjudication.' This stringent position aims to safeguard the fundamental principles of justice and uphold public trust in the judiciary. The ruling highlighted the insidious threat posed by unchecked AI in the legal sphere, with Justice Narasimha evocatively comparing the 'production of fake, non-existent, and hallucinated material and its utilisation as precedents in law' to 'the release of methyl isocyanate in the province of law and justice: invisible, insidious, and catastrophic by the time anyone notices.' This powerful analogy, referencing the Bhopal Gas Tragedy, underscores the potential for widespread and devastating consequences if AI-generated inaccuracies are allowed to proliferate without human oversight and rigorous verification. The Court stressed that such material 'not only contaminates but takes away the very lifeblood of judicial determination.' While acknowledging the increasing reliance on AI to improve efficiency in legal practice due to growing workloads, the bench drew a crucial distinction between AI as an assistive tool and its potential to replace human judgment. The Court clarified that its judgment does not discourage the 'rightful use of AI,' but specifically targets the 'presentation or reliance on fake or hallucinated material as if it were a court precedent.' It underscored the necessity of meaningful human oversight at every stage of the adjudicatory process. To address this burgeoning challenge, the Supreme Court directed the Bar Council of India (BCI), the apex statutory body regulating the legal profession, to constitute a committee. This committee is tasked with examining the issue of AI's use in courts, formulating appropriate norms, prescribing guiding principles to prevent such occurrences, and outlining the disciplinary actions that will follow violations. This directive emphasizes the collective responsibility of both the Bar and the Bench in adapting to technological advancements while upholding ethical standards and judicial integrity. This ruling comes amidst a growing global debate on the responsible integration of AI into legal systems and follows previous instances where Indian courts flagged AI-generated inaccuracies. The Supreme Court itself had previously published Draft Regulations for Use of Artificial Intelligence in Courts, 2026, for public consultation, which stipulate that AI systems should function only in an assistive capacity and not supplant judges' roles, also requiring disclosure of AI-assisted filings. The July 2, 2026, judgment reinforces these principles, sending a clear message across the Indian legal fraternity regarding the grave risks associated with unverified AI-generated content and the absolute necessity of human diligence in upholding justice.

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