The Supreme Court has set aside an NCLT order that relied on AI-generated fake judicial precedents, calling it 'catastrophic' and 'methyl isocyanate of law'. It declared zero tolerance for unverified AI citations and directed the Bar Council of India (BCI) to form a committee to regulate AI use in courts, warning against delegating judicial reasoning to machines.
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- ›Date of Judgment: July 2, 2026
- ›SC Bench: Justices P.S. Narasimha and Alok Aradhe
- ›Target this Data: Default amount recorded by NCLT = ₹87.43 crore
- ›Target this Nodal Body: Bar Council of India (BCI) directed to form committee
- ›Target this Legal Point: Section 7 of the Insolvency and Bankruptcy Code (IBC)
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