Pooja Ramesh Singh v. Jammu and Kashmir Bank ltd. Anr.

CASE PROFILE

CASE NAME: Pooja Ramesh Singh v. Jammu and Kashmir Bank ltd. Anr.

COURT: Supreme Court of India

CITATION: 2026 INSC 668[1]

CASE NUMBER: Civil Appeal No. 11950 of 2025

DATE OF JUDGEMENT: 2 July 2026

BENCH:

• Justice Pamidighantam Sri Narasimha
• Justice Alok Arade

AUTHOR OF THE JUDGMENT: Justice Pamidighantam Sri Narasimha

NATURE OF THE CASE: Civil Appeal arising from proceedings under the Insolvency and Bankruptcy Code, 2016(IBC).

INTRODUCTION

This judgment is an landmark judgment given by supreme court of India related to artificial intelligence (AI) usage in legal research and court proceeding. The Court held that judicial decisions based on AI generated case citation cannot be sustained in law, as it can be fake or may not exist. This judgment is important because it lays down standards regarding usage of AI ; how to use AI and responsible use of AI in legal professions, and reinforced the duty of advocates and judges to verify legal authorities before relying upon them , which means that they have to make sure that every cited precedent is genuine and legally valid.

FACTS OF THE CASE

• A company named Essel Infra Projects ltd took a loan from Jammu and Kashmir Bank ltd.
• Later the bank claimed the company owed them Rs. 87.43 crore and did not pay back.
• The bank filed an application under Section 7 [2]of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT) seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The NCLT admitted the application.

Pooja Ramesh Singh, a director of the company, opposed the order of NCLT and afterward appealed before higher forum to pursue legal remedies.

ISSUES BEFORE THE COURT

• If a company took a loan from a bank and later transfer his liability to pay to another company after restructuring, then will the company will not be held liable to pay debt or will be held liable to pay debt?
• If AI generated precedents or fake laws are used by judge to take decisions, is that judgment will be valid in law or not?
• Whether it is the duty of advocates and judges to verify AI- generated content before using them, such as precedent used in cases are real or AI-generated and what preventions should be taken so that misuse of AI in judicial proceeding cannot be done?

RELEVANT STATUTORY PROVISIONS:

• Section7, Insolvency and Bankruptcy Code, 2016[3]– Initiation of corporate Insolvency Resolution Process by a financial creditor.
• Insolvency and Bankruptcy Code, 2016[4]-Governing statute.

ARGUMENTS

ARGUMENTS ON THE CORPORATE DEBT (INITIAL DISPUTE)

Arguments of the Appellant (Pooja Ramesh Singh)

• The appellant contended that pursuant to the corporate restructuring scheme approved by the High Court in 2014, the liabilities of Essel Infra Projects Ltd. had been transferred to other entities. Thus, the company could no longer be held responsible for the unpaid debt according to the corporate restructuring scheme approved by the High Court in 2014[5] .
• She further argued that the renewed loan sanction letters issued by Jammu and Kashmir Bank in 2017 did not mention the earlier corporate guarantee. Therefore, the company treated the previous corporate guarantee as cancelled.
• The appellant maintained that the initiation of insolvency proceedings against the company was therefore legally unsustainable.

Arguments of Jammu & Kashmir Bank Ltd.

• The respondent bank argued that the corporate guarantee continued to remain valid despite the internal restructuring of the company.
• It relied upon the terms of the guarantee deed, which expressly provided that any restructuring or change in the company’s management would not extinguish its liability.
• The bank contended that it had never issued a formal written document releasing the company from its debt obligation of RS.87.43 crore.
• Therefore, the company remained liable to pay the unpaid debt.[6]

Arguments on the AI Contamination (Before the Supreme Court)

By the Appellant (Pooja Ramesh Singh):

• The appellant contended that the judgments were tainted because they relied upon six judicial precedents that did not actually exit.
• It was submitted that these citations appeared to have originated from AI-generated legal research containing “hallucinated” case references.
• Consequently, the appellant contended that the decisions of the NCLT and NCLAT could not be sustained in law.

The Stand Taken by the Supreme Court (Acting on the Issue):

• The Supreme Court held that AI-generated material should be verified before relying upon them while deciding cases.
• The Court observed that the judicial decisions cannot be formed on grounds of AI-generated precedents.
• The Supreme Court also laid down standards for the responsible use of AI in legal research.
• The Court pronounced that advocates must verify the authenticity of every precedent before depending upon it in court proceedings.

JUDGMENT

• The Supreme Court allowed the appeal filed by Pooja Ramesh Singh by setting aside the judgments of the NCLT and the NCLAT[7].
• The Court held that any decision made on grounds of fake or non-existent precedents cannot be held valid.
• The Supreme Court restored the insolvency proceedings and ordered that the case be heard afresh from the beginning.
• The Court also issued guidelines regarding the usage of Artificial Intelligence (AI) in the legal profession and highlighted that AI-generated material must be verified before being trusted.[8]

RATIO DECENDI

• The Supreme Court held that courts must not depend upon precedents generated by AI.
• Advocates must independently verify whether the content generated by AI is appropriate to use or not, and whether it exists or is fake.
• AI should be used by advocates for legal research, but it does not mean that it can replace legal judgment.
• Judicial integrity requires complete authenticity of legal authorities relied upon in adjudication.

SIGNIFICANCE OF THE JUDGMENT

It is India’s first major Supreme Court decision regarding the use of Artificial Intelligence (AI) in the legal profession.

• It established standards for the use of AI assistance in legal research.
• *It strengthens confidence in judicial decision-making.
• It reinforces the professional responsibility of advocates.
• It encourages the responsible and accountable use of emerging technology in courts.

CRITICAL ANALYSIS

• The Usage of AI in the legal profession has been increased and this judgment of Supreme Court ensures that there should be no misuse of AI in legal profession.
• The judgment explains that the usage of AI should be limited, and AI-generated precedents cannot be relied upon.
• Advocates and court authorities need to verify precedents citied in case proceedings before depending upon them for decision making.
• This judgment highlighted the professional duty of advocates to check whether a precedent actually exists before citing it.
• It also stresses the need to verify legal research and drafting before submitting documents in court.
• The judgment highlights the growing disputes regarding the use of AI in legal practice.
•  The risks of AI hallucinations are identified by Supreme Court but it did not provide detailed guidance regarding the use of AI in the legal field.
• In my view, the Bar Council of India should provide proper detailed guidelines regarding the use of AI in legal research and legal drafting.
• Instead of discouraging the use of AI in the legal profession, the authorities should regulate and limit its usage to ensure responsible and ethical use of AI.

CONCLUSION

This judgment has highlighted the usage of AI in legal profession and held that it is responsibility of advocates and courts to verify precedents before making any decision, whether the precedents are real or Ai-generated, decision cannot be made based on AI-generated material. This judgment has make it clear that AI can be used for legal research but advocates and courts cannot completely depend upon it and ensure the precedents should be real , this decision also highlighted the need of proper regulations and guidance regarding usage of AI-generated content in legal profession .

In my opinion, AI should be used in legal profession but with precautions.

Reference(S):

[1] Pooja Ramesh Singh v Jammu and Kashmir Bank Ltd and Another 2026 INSC 668 (SC).

[2] Insolvency and Bankruptcy Code 2016, s 7.

[3] Insolvency and Bankruptcy Code 2016, s 7.

[4] Insolvency and Bankruptcy Code 2016.

[5] https://indiankanoon.org/docfragment/138995826/?formInput=scheme+of+demerger

[6] https://www.casemine.com/judgement/in/68c31cdb122f6526c79152c2/amp

[7] https://www.livelaw.in/sc-judgments/2026-livelaw-sc-653-pooja-ramesh-singh-versus-jammu-and-kashmir-bank-ltd-anr-539623

[8] https://www.verdictum.in/supreme-court/pooja-ramesh-singh-v-jammu-and-kashmir-bank-ltd-2026-insc-668-ai-generated-precedents-1616998