The Supreme Court overturned decisions made by the NCLT and NCLAT due to the usage of Artificial Intelligence (AI)-generated fake judicial precedents. The Court emphasized a “zero tolerance” policy towards such fabricated materials in legal judgments.
Highlighting the importance of human judgment over AI, the Court stressed the need for AI to aid but not replace judicial reasoning. The case involved insolvency proceedings initiated by Jammu and Kashmir Bank Ltd. against a suspended director of Essel Infraprojects Ltd.
The Supreme Court found that the NCLT had relied on non-existent and AI-generated fake material in its judgments. It expressed concerns over the misuse of AI in legal processes and called for strict control over its application in adjudication.
The Court warned against the unverified use of AI-generated material in legal proceedings, declaring that decisions based on such material are not valid in the eyes of the law. It directed the Bar Council of India to address the issue of presenting fake AI-generated precedents in courts seriously.
