The Supreme Court has set aside a ruling of the National Company Law Tribunal (NCLT) after finding that it relied on fake legal precedents generated by artificial intelligence, warning that courts must adopt a “zero-tolerance” approach towards fabricated citations.
A bench of the apex court observed that the use of AI-generated judgments without proper verification poses a serious threat to the justice delivery system. It stressed that while artificial intelligence can assist legal research, judges and lawyers must independently verify every case citation before relying on it in judicial proceedings.
Expressing concern over the growing use of AI tools, the court described fabricated legal citations as the “methyl isocyanate of the law”, drawing a comparison with the highly toxic gas responsible for the 1984 Bhopal disaster. The bench said false precedents have the potential to contaminate the legal process and undermine public confidence in the judiciary.
The case came before the Supreme Court after it found that the NCLT’s order referred to judgments that either did not exist or had been incorrectly generated using AI-based legal research tools. As a result, the apex court quashed the tribunal’s decision and directed it to reconsider the matter afresh based on authentic legal authorities.
The judges clarified that artificial intelligence should be viewed as an aid rather than a substitute for judicial reasoning. They noted that AI platforms can sometimes generate inaccurate or entirely fictional information, making human oversight essential in legal proceedings.
The court also urged judicial officers, lawyers and legal researchers to exercise greater caution while using generative AI tools. It emphasised that every citation and legal proposition must be verified from official sources before being included in pleadings, arguments or judgments.
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