SC Strikes Down Tribunal Judgment Based on Fake, Hallucinated AI Material

The Supreme Court has set aside a judgment on Essel Infraprojects’ insolvency after finding that the tribunal had relied on non-existent, fake, and hallucinated judgments/precedents generated through AI tools. The Supreme Court bench said, "such reliance on hallucinated material strikes at the integrity of adjudication and its processes, and courts must adopt a zero-tolerance approach when dealing with fake AI precedents produced by lawyers without verification".The same amounts to misconduct on the part of the advocate, the top court added.The top court said, "It is necessary for courts to adopt a zero-tolerance mode for producing, citing, or using AI-generated precedents without verification. It is misconduct on the part of an advocate to cite

such judgments without verification," the Bench said.Equally, it is a serious lapse if a judge relies on such fake or hallucinated AI-generated material as precedents in support of the determination, the top court emphasised."We have no hesitation in declaring that such a decision 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 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," the court stated.Hence, it set aside the NCLT verdict as well as the judgment of the National Company Law Appellate Tribunal (NCLAT), which had upheld the NCLT judgment.“For the reasons to follow, we have set aside the judgement of the NCLT, as well as the NCLAT judgement in opinion, to affirm and maintain the integrity of the adjudication and its processes,” the Court said.