Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd (Supreme Court of India, 2 July 2026)
Case note. 2026 INSC 668, Civil Appeal No.11950 of 2025. The National Company Law Tribunal admitted an insolvency application relying on six citations that were non-existent, wrongly attributed or carried non-existent paragraphs, none cited by counsel; the appellate tribunal did not detect it. The Supreme Court set both decisions aside, held that a decision resting on fabricated material "is no decision at all", declared zero tolerance for the Bar and the Bench, and directed the Bar Council of India to prescribe a guiding principle with disciplinary consequences.
The proceeding
Civil Appeal No.11950 of 2025, decided 2 July 2026 by Narasimha and Aradhe JJ, reportable. The appellant, a suspended director of Essel Infraprojects Ltd, the corporate guarantor of a borrower, appealed the National Company Law Appellate Tribunal's order of 11 September 2025 affirming the National Company Law Tribunal's order of 28 August 2024 admitting the bank's application under Section 7 of the Insolvency and Bankruptcy Code, 2016.
What happened below
The NCLT rejected the corporate debtor's contentions by reference to six decisions: State Bank of India v. Shree Ram Urban Infrastructure Ltd, 2020 SCC OnLine SC 341; Everest Kento Cylinders Ltd v. Union of India (2015) 2 SCC 1; ICICI Bank Ltd v. Urban Infrastructure Real Estate Ltd (2019) 16 SCC 528; V.S. Dempo & Co. Ltd v. Reliance Communications Ltd (2021) 10 SCC 176; Canara Bank v. N.G. Subbaraya Setty (2018) 16 SCC 228; and Sarbjit Singh v. Union Bank of India (2022) 7 SCC 464. The NCLAT reproduced the list in paragraph 12 of its order (paragraph 13).
Senior counsel for the appellant pointed out at the outset that these were "fake and non-existent, probably AI-generated", and that even where citations were accurate the excerpted paragraphs were not traceable to the judgments (paragraph 14). The Court's own examination found (paragraph 15): the first a wrong citation of an existing judgment (the reference belongs to M. Subramaniam v. S. Janaki) with a non-existent paragraph; the second a correct citation with a non-existent paragraph; the third a non-existent citation; the fourth a non-existent citation; the fifth a correct citation with a non-existent paragraph; the sixth a non-existent citation. The bank's affidavit stated that the judgments "were not cited by its counsel at the bar" and that the precedents "were obtained through its own research" (paragraph 16). "The fake, non-existent judgments escaped scrutiny by the first statutory appellate tribunal."
What the Court held
The judgment opens: "This is yet again a case where the Tribunal relied on non-existent, fake and hallucinated material, generated through Artificial Intelligence (AI), as if it were a precedent", and states the Court's "resolve to adopt AI technology in aid of adjudication, while at the same time asserting and declaring total and absolute control over adjudication, with a human in the loop at every stage" (paragraph 1).
On the hallucination trait (paragraph 6): the Court is concerned neither with its cause nor with its engineering cure; for adjudication, the production of fake material "and its utilisation as precedents in law, is like the release of methyl isocyanate in the province of law and justice: invisible, insidious, and catastrophic by the time anyone notices".
Paragraph 7: "It is necessary for Courts to adopt a zero-tolerance mode for producing, citing or using AI-generated precedents without verification. It is a misconduct on the part of an advocate to cite such judgments without verification. Equally, it is a serious lapse if a judge relies on such a fake or hallucinated AI-generated material as precedents in support of the determination. 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". The judgment "shall have no bearing on the rightful use of AI".
Paragraph 8: "We are aware that mere declaration of prohibitory action is not sufficient; there must be a consequential action following accountability."
Paragraph 9: "we direct the Bar Council of India, being the apex statutory body, to constitute a committee and deliberate on this issue of members of the bar submitting such fake and hallucinated material before the Court as if they are precedents of law. The Bar Council must take up this issue with utmost seriousness, deliberate earnestly, and prescribe a guiding principle to prevent such occurrences, along with the disciplinary action that will follow a violation of the norms."
Paragraph 17: "A decision of a Court or an adjudicating authority based on material which is fake and hallucinated is no decision at all, and it amounts to subversion of the rule of law."
The NCLT and NCLAT orders were set aside, the Section 7 application restored for decision on its merits within two weeks, and status quo directed meanwhile (paragraphs 18 to 20). The Court expressed no view on the merits.
Why it matters
Three things. The failure was the tribunal's own research, with a human present at two levels; presence did not save the decision. The Court stated the consequence in the terms of office: misconduct for the advocate, serious lapse for the judge, and a decision that is "no decision". And the Court directed the statutory regulator to write the rule and its discipline: so far as the author has been able to document in English-language sources, the first instance of a court ordering a statutory professional body to govern AI. The Court also said, at paragraph 5, that the issue cannot be resolved by judicial orders alone but "only through Public Policy and enforceable Rules and Regulations", and that the real success lies "in the power of the will of the Bar as well as the Bench".
Note on citation
Vijay Ghanshyam Gadiya v. Union of India, 2026 INSC 947, cites this judgment as 2026 SCC OnLine SC 1258. The neutral citation is used here.
Provenance and method.
Where this was published
- Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd & Anr
- 2026 INSC 668
- Civil Appeal No.11950 of 2025
- Supreme Court of India
- judgment dated 2 July 2026 (Narasimha and Aradhe JJ)
- reportable (archived copy A1
- digitally signed 2 July 2026
- read 25 September 2026)
Changelog
- 2026-09-25, version 1. First published.