Goa, July 2 -- The Supreme Court has set aside an order passed by the National Company Law Tribunal (NCLT) in the Essel Infraprojects insolvency matter after finding that the tribunal relied on non-existent and AI-generated fake legal precedents. The landmark ruling also issued a strong warning against the unverified use of artificial intelligence in judicial proceedings.

A bench of Justices PS Narasimha and Alok Aradhe observed that the use of fabricated or hallucinated AI-generated judgments poses a serious threat to the justice delivery system. Comparing it to the release of methyl isocyanate, the court said such material is "invisible, insidious and catastrophic" and can erode the very foundation of judicial decision-making if left u...