Case Note & Summary
The Supreme Court dealt with a civil appeal arising from an NCLT order that had been upheld by the NCLAT. The Court found that the NCLT had relied on non-existent, fake, and hallucinated material generated through Artificial Intelligence as if it were a valid precedent. The Court observed that while AI has transformative capabilities and can aid adjudication, unregulated use of AI can infiltrate legal practice and judicial decision-making. The Court emphasized the need for human oversight, noting that the Solicitors Regulation Authority in the UK had approved the first AI-driven law firm but with strict safeguards against AI hallucinations. The Court set aside both the NCLT and NCLAT judgments to maintain the integrity of the adjudication process, asserting that AI must be used only as an aid with a human in the loop at every stage.
Headnote
A) Artificial Intelligence - Judicial Use - AI Hallucinations - Integrity of Adjudication - The Tribunal relied on non-existent, fake and hallucinated material generated through AI as precedent - Supreme Court set aside the judgment of NCLT and NCLAT, holding that AI cannot substitute human reasoning and that total human control with a human in the loop at every stage is essential (Paras 1-4).
Issue of Consideration
Whether a judgment based on non-existent, AI-generated fake precedents can be sustained, and what safeguards are necessary for use of AI in judicial adjudication.
Final Decision
The Supreme Court set aside the judgment of the NCLT as well as the judgment in appeal (NCLAT) to affirm and maintain the integrity of the adjudication and its processes.
Law Points
- Artificial Intelligence cannot replace judicial reasoning
- AI hallucinations invalidate judgments
- human oversight mandatory in adjudication
- integrity of judicial process requires verification of cited precedents
