Mumbai, July 3 -- The Supreme Court of India on Thursday has set aside orders passed by two insolvency tribunals after finding that the tribunal relied on fake and non-existent judicial precedents generated using artificial intelligence (AI) in a landmark judgment involving Essel Infraprojects Ltd. The apex court quashed the orders of both the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) that had admitted the firm into corporate insolvency, remanding the matter back to the NCLT for a fresh, fact-based adjudication. The controversy caught the court's eye when senior advocate Madhavi Divan, representing Essel Infraprojects Ltd, pointed out that several judgements that the NCLT had relied on either didn't exist or had passages not there in the original judgments. A bench comprising justice Pamidighantam Sri Narasimha and justice Alok Aradhe said courts must adopt a "zero tolerance" approach toward the use of fake, AI-generated documents. The bench added that using such hallucinated material without proper verification severely threatens the integrity of the judicial process. An independent verification conducted by the Supreme Court confirmed the issue. It found that some citations referred to entirely non-existent judgments, while others cited genuine Supreme Court decisions, but included fabricated paragraphs attributed to the court. The case stems from insolvency proceedings initiated by Jammu & Kashmir Bank against Essel Infraprojects Ltd, which had acted as a corporate guarantor for loans given to another firm. Pooja Ramesh Singh, a suspended director of Essel Infraprojects, had challenged the orders admitting the company into the corporate insolvency resolution process under a Section 7 application....