Citing AI-Generated Non-Existent Judgments In Court Warrants Exemplary Costs; Advocates Cannot Evade Duty By Blaming Litigants: Supreme Court

"Advocate-on-Record for the appellants, facing the Court’s query, sought to shift the entire blame on the appellants while at the same time feigning ignorance of what the compilation contained... Exemplary costs were proposed to be imposed while coming down heavily on the appellants."Supreme Court, in a stern reprimand delivered on October 15, 2026, held that placing compilations before the court containing "AI generated non-existent judgments" constitutes an impermissible abuse of judicial process warranting exemplary costs, emphasizing that an Advocate-on-Record cannot disclaim responsibility by feigning ignorance or shifting the blame onto litigants. A bench comprising Justice Dipankar Datta and Justice Augustine George Masih observed that while it initially proposed to "come down heavily on the appellants" and levy punitive costs for relying on hallucinated precedents, it refrained from enforcing monetary penalties solely on account of the subsequent demise of the appellant.

The issue arose during statutory appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016, where corporate debtors GSTAAD Hotels Pvt. Ltd. and Neo Capricorn Plaza Pvt. Ltd. challenged NCLAT orders affirming the initiation of Corporate Insolvency Resolution Process under Section 7 over defaults exceeding ₹665 crores. In support of their arguments, counsel for the appellants submitted a compilation of judicial precedents. The respondent financial creditor, Omkara Assets Reconstruction Pvt. Ltd., raised an immediate objection, pointing out that the compilation was replete with fabricated, non-existent rulings churned out by Artificial Intelligence.

The court was called upon to determine the legal and professional accountability of advocates and litigants who cite fictitious, AI-generated case law before constitutional courts. The bench was also called upon to determine whether the demise of a contesting appellant after conclusion of arguments abates the appeal in light of Order 22 Rule 6 CPC.

Supreme Court Flags Undesirable Practice Of Citing Hallucinated AI Precedents

Expressing grave concern over the creeping misuse of artificial intelligence tools in legal advocacy, the Supreme Court recorded that an "undesirable incident" transpired during the hearing of the statutory appeals. Justice Augustine George Masih, penning the judgment for the bench, noted that the compilation of authorities submitted on behalf of the appellants was challenged on the threshold by the opposite side for containing fabricated decisions.

The court took note of the financial creditor's objection that the submitted authorities had no legal existence and were entirely manufactured by generative technology. Calling out the practice, the bench noted that "the compilation was replete with AI generated non-existent judgments," signaling that courts will not tolerate artificial intelligence hallucinations masquerading as valid precedents.

Advocate-On-Record Cannot Disclaim Knowledge Or Shift Blame Onto Litigants

Addressing the professional duty expected of Supreme Court practitioners, the bench reprimanded the Advocate-on-Record for attempting to deflect responsibility. The court noted that when confronted with queries regarding the genuineness of the citations, counsel attempted to abdicate professional ownership.

The bench recorded with disapproval that the "Advocate-on-Record for the appellants, facing the Court’s query, sought to shift the entire blame on the appellants while at the same time feigning ignorance of what the compilation contained." The court highlighted that legal practitioners remain directly responsible for the veracity of the compilations and pleadings filed under their names.

Senior Counsel Seeks Apology As Court Proposes Exemplary Penalties

The judgment noted that when the bench confronted counsel regarding the fictitious authorities, learned senior counsel appearing for the appellants intervened to contain the damage. Recognizing the gravity of the infraction, senior counsel stepped forward to shoulder the blame and sought unconditional forgiveness from the bench.

The court observed that such conduct had almost led to the forfeiture of the appellants' right to be heard on the merits of their insolvency appeals. The bench noted that "exemplary costs were proposed to be imposed while coming down heavily on the appellants," while keeping open the question of whether a party relying on counterfeit authorities even deserved an adjudication on merits.

"This Court had proceeded to hear the appeal on merits keeping the objection of the respondents (that the appellants by reason of such conduct, do not deserve a hearing on merits) open. Exemplary costs were proposed to be imposed while coming down heavily on the appellants."

Exemplary Costs Deleted Solely Due To Litigant's Demise

The bench clarified that the appellants were spared heavy punitive costs only because of an unforeseen development that arose after arguments concluded. The court was informed that the first appellant, Deepak Raheja, had passed away prior to the pronouncement of the verdict.

Taking note of the demise, the court exercised compassion and modified its proposed punitive order. The bench recorded that "lately, this Court has been informed of the death of the first appellant" and consequently, "the order requiring payment of costs has been deleted by 'no order as to costs'."

Order 22 Rule 6 CPC Applies To Avert Abatement Once Hearing Concludes

Addressing the procedural status of the appeals after the appellant's death, the court applied the principles of the Code of Civil Procedure, 1908. The bench observed that because the death took place after arguments had been heard and judgment reserved, the statutory protection against abatement applied.

The Supreme Court ruled that in view of Order 22 Rule 6 CPC, the appeals did not abate upon the appellant's demise. The bench clarified that any application filed or contemplated to substitute the legal heirs of the deceased was wholly redundant and stood disposed of.

Underlying Insolvency Appeals Dismissed On Merits

Deciding the substantive dispute under Section 7 of the IBC, the Supreme Court affirmed the concurrent findings of the NCLT and NCLAT admitting both corporate debtors into insolvency. The bench held that the evidentiary standard under Section 7 is a summary determination based on preponderance of probabilities, and an authenticated Information Utility record under Section 7(4) carries a high presumption of default that cannot be displaced by mere bookkeeping disputes or balance-sheet solvency claims.

The Supreme Court dismissed the appeals and affirmed the initiation of insolvency proceedings against GSTAAD Hotels and Neo Capricorn Plaza, while waiving exemplary costs for AI-generated citations purely due to the appellant's demise. The ruling serves as an authoritative judicial warning that advocates bear personal responsibility for ensuring the authenticity of all cited authorities.

Date of Decision: 15 October 2026