Judgment Intelligence
Disposed OfPooja Ramesh Singh v. Jammu and Kashmir Bank Ltd. & Anr.
2026 INSC 668
Civil Appeal No. 11950 of 2025
- Court
- Supreme Court of India
- Date of Decision
- 2 July 2026
- Bench
- Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
- Relevant Acts & Sections
- Insolvency and Bankruptcy Code, 2016 - Sections 7 and 14
Final Outcome
Appeal disposed of: the NCLT and NCLAT orders of 28.08.2024 and 11.09.2025 set aside and the Section 7 application restored for a fresh decision on merits, preferably within two weeks, with status quo meanwhile; the Bar Council of India directed to constitute a committee (paras 9, 18-21).
Source Supreme Court of India, www.sci.gov.in — judgment dated 02.07.2026
Key holdings
- Zero tolerance for citing or relying on unverified AI-generated precedents (para 7).
- A decision based on fake or hallucinated material is no decision in law (paras 7, 17).
- Citing such material unverified is misconduct for an advocate and a serious lapse for a judge (para 7).
- The Bar Council of India must frame norms and the disciplinary action that follows a breach (para 9).
- The ruling does not restrict the rightful use of AI (para 7).
Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.
Brief Facts
Jammu and Kashmir Bank filed a Section 7 IBC application against Essel Infraprojects Ltd., corporate guarantor of a defaulting borrower, and the NCLT, Mumbai admitted it on 28.08.2024 (paras 10-12). The appellant, a suspended director, argued before the NCLAT that the guarantee had ended after a demerger and amalgamation and a renewed sanction letter; the NCLAT dismissed her appeal on 11.09.2025, quoting six Supreme Court judgments the NCLT had relied on (paras 12-13). Before this Court her counsel pointed out that these citations were fake and probably AI-generated (para 14).
Court's Findings
AI is not merely an aid but an alternative to our own thinking and decision-making, so its use must be under absolute control, through public policy and regulations and through care by the Bar and the Bench (paras 3-5). Hallucinated material used as precedent is 'invisible, insidious, and catastrophic' for justice (para 6). Courts must adopt zero tolerance for producing, citing or using AI-generated precedents without verification: it is misconduct for an advocate and a serious lapse for a judge, and such a decision is no decision in law whether or not the material bore directly on it (para 7). The ruling does not touch the rightful use of AI (para 7). The Court's own check found two correct citations with non-existent paragraphs, one citation belonging to another judgment, and three non-existent citations (para 15). The bank's affidavit said they were never cited at the bar; the NCLT found them in its own research, and the NCLAT missed them (para 16). A decision on fake material subverts the rule of law (para 17).
Legal Principle
A decision of a court or tribunal that relies on fake, non-existent or hallucinated AI-generated material as precedent is no decision in the eyes of the law and must be set aside, however small that material's role; citing such material without verification is misconduct by an advocate and a serious lapse by a judge (paras 7, 17).