Red flagging the use of “non-existent, fake, and hallucinated” judgements generated by artificial intelligence (AI), the Supreme Court on Thursday, July 2, set aside a verdict of the National Company Law Tribunal (NCLT), saying that courts must adopt zero tolerance against citing or using AI-generated precedentsThe bench comprising Justices PS Narasimha and Alok Aradhe said, “The production of fake, non-existent, and hallucinated 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. It not only contaminates but takes away the very lifeblood of judicial determination.” It set aside an NCLT judgement on Essel Infraprojects insolvency after finding that the tribunal had relied on non-existent, fake and hallucinated judgement precedents generated through AI tools.The top court found that several “precedents” cited by the NCLT to justify its decision simply did not exist. These included fabricated case names and paragraphs wrongly attributed to genuine citations. For instance, the judgement cited ICICI Bank Ltd vs Urban Infrastructure Real Estate Ltd (2019) 16 SCC 528 and Sarbjit Singh vs Union Bank of India (2022) 7 SCC 464, both of which were found to be entirely non-existent citations.