Supreme Court Sets Aside NCLT and NCLAT Judgments for Reliance on AI-Generated Fake Precedents, Landmark decision emphasizes zero tolerance for AI hallucinations in judicial proceedings, directs Bar Council of India to establish guidelines.
In a significant ruling, the Supreme Court of India has set aside the judgments of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) in the case of Pooja Ramesh Singh v. Jammu And Kashmir Bank Ltd. The Supreme Court, comprising Justices Pamidighantam Sri Narasimha and Alok Aradhe, emphasized the catastrophic impact of relying on AI-generated fake or hallucinated precedents in legal adjudication.
The case involved a Section 7 application under the Insolvency and Bankruptcy Code, 2016, filed by Jammu and Kashmir Bank Ltd. against Essel Infraprojects Ltd., where the NCLT and subsequently the NCLAT relied on non-existent AI-generated judgments. The Supreme Court underscored that such decisions are unsustainable and subvert the rule of law, necessitating their annulment to maintain judicial integrity.
The apex court also directed the Bar Council of India to form a committee to address the issue of advocates submitting fake AI-generated materials as precedents, prescribing guiding principles and disciplinary actions. The judgment stressed the need for public policy and enforceable regulations to regulate AI usage in legal practice, ensuring human oversight and absolute control.
The court restored the Section 7 application to its original number, instructing the NCLT to dispose of it expeditiously, while maintaining the status quo. This landmark judgment highlights the necessity for vigilance in adopting AI technologies within legal frameworks, safeguarding the sanctity of judicial processes.
Bottom Line:
Courts must exercise zero tolerance for AI-generated hallucinated or fake precedents; such judgments are unsustainable and must be set aside.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 7
Pooja Ramesh Singh v. Jammu And Kashmir Bank Ltd., (SC) : Law Finder Doc id # 2933388
