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SC Sets Aside NCLT Order Citing AI-Hallucinated Judgments; Directs BCI Committee on AI Use

Target:UPSC GS-IIMPSCSSC GATeachingBankingPrelims HighMains HighStatic GK Link
04 Jul 2026
~2 min
Source: Indian Express
Key Data:6 AI-hallucinated judgments3 non-existent3 misquotedBench: Justices P S Narasimha and Alok AradheCase: Essel Infraprojects Ltd₹200 crore loan
Bodies:Supreme Court of IndiaNational Company Law Tribunal (NCLT)National Company Law Appellate Tribunal (NCLAT)Bar Council of India (BCI)Jammu and Kashmir BankBombay High Court
Practice MCQs from today's news ▸
What This Article Covers

1.SC set aside NCLT order based on six AI-hallucinated judgments; three were completely fake, three had misquoted passages.

2.Bench of Justices P S Narasimha and Alok Aradhe called such AI use 'like release of methyl isocyanate in law' and a threat to judicial determination.

3.Supreme Court directed Bar Council of India to form a committee to regulate AI use by advocates; parties ordered status quo until NCLT decides afresh.

The Big Picture
Prelims · HighMains · High

The Supreme Court struck down an NCLT order that relied on six AI-hallucinated judgments (three non-existent, three misquoted). The bench warned that AI-generated fake precedents are 'catastrophic' for justice and directed the Bar Council of India to constitute a committee on AI use in litigation. This landmark ruling impacts judicial integrity and the ethical use of AI in legal processes.

Exam Lens

Quick Exam Facts From News

Number of AI-hallucinated judgments cited6 (3 non-existent, 3 misquoted/correspond to different cases)
Supreme Court BenchJustices P S Narasimha and Alok Aradhe
Case related toEssel Infraprojects Ltd vs Jammu & Kashmir Bank (Insolvency proceedings)
Direction toBar Council of India – constitute committee on AI use in litigation
Previous similar case (2026)Gummadi Usha Rani v Sure Mallikarjuna Rao – Andhra Pradesh trial court used AI-generated judgments

1-Minute Revision

  • ›Number of AI-hallucinated judgments cited: 6 (3 non-existent, 3 misquoted/correspond to different cases)
  • ›Supreme Court Bench: Justices P S Narasimha and Alok Aradhe
  • ›Target this Data: 6 AI-hallucinated judgments; 3 non-existent, 3 misquoted
  • ›Target this Nodal Body: Bar Council of India (BCI) – directed to form committee on AI use in litigation
  • ›Target this Bench: Justices P S Narasimha and Alok Aradhe

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which statutory body has been directed by the Supreme Court to constitute a committee to examine the use of artificial intelligence in litigation?

Q2Statement-basedHard

Consider the following statements regarding the Supreme Court's order on AI-hallucinated judgments:

1. The Supreme Court set aside the NCLT order because it relied on six judgments that were either non-existent or misquoted.

2. The bank's counsel had cited all six AI-generated judgments before the NCLT.

3. The Court likened AI-generated fake material to the release of methyl isocyanate in the province of law and justice.

Which of the statements given above is/are correct?

Q3Data-centricMedium

How many of the six AI-hallucinated judgments cited by the NCLT were completely non-existent?

Q4Application/ImpactMedium

What is the primary concern raised by the Supreme Court regarding the use of AI-generated fake judgments in judicial proceedings?

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