New Delhi, July 3 -- The Supreme Court on Thursday set aside orders passed by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) after finding that both forums had relied on non-existent, AI-generated judicial precedents while deciding an insolvency dispute - marking one of the most significant judicial interventions on the use of artificial intelligence in legal proceedings in India.

A bench of Justices PS Narasimha and Alok Aradhe held that judicial decisions founded on fabricated precedents cannot be sustained and declared a zero-tolerance approach for the citation or use of unverified AI-generated material in adjudication.

The court directed the Bar Council of India (BCI) to constitute a...