India Supreme Court Sets Aside NCLT Orders Built on Fake AI Precedents — Declares Zero Tolerance, Directs Bar Council to Frame Disciplinary Norms

The Supreme Court of India, in Pooja Ramesh Singh v. Jammu & Kashmir Bank Ltd (2026 INSC 668, July 2), set aside orders of the National Company Law Tribunal and National Company Law Appellate Tribunal after finding that six judicial precedents cited by the NCLT were either entirely fabricated or contained non-existent paragraphs wrongly attributed to genuine citations — all apparently generated by AI. The court undertook an independent examination of each citation, finding cases that did not exist at all, correct citations with fabricated paragraphs, and wrong case names attached to existing citation numbers. The ruling established three principles that will propagate through legal systems globally: (1) a decision built on "even an iota of fake or hallucinated material is no decision in the eyes of the law," regardless of whether the fabricated material directly affected the outcome; (2) citing an AI-generated judgment without first verifying it constitutes professional misconduct for an advocate; and (3) relying on such material as a judge constitutes a serious lapse. The court directed the Bar Council of India to constitute a committee to prescribe disciplinary norms for advocates who place hallucinated material before courts. The companion development is the court's separately drafted Regulations for Use of AI in Courts 2026 — circulated for consultation through July 15 — which permits AI for case management, transcription, translation, and legal research (all subject to human verification and Appropriate Authority approval), bans AI from deciding judicial outcomes or risk-scoring parties and witnesses, requires disclosure declarations on all AI-assisted filings, and holds filers fully responsible for AI-generated inaccuracies without AI character as a defence.