Authored By: Roshan Gupta
Shri Swami Dayal Bhatnagar Law College, Chaudhary Charan Singh University
Case Citation & Basic Information
Case: Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd. & Anr.
Citation: 2026 INSC 668
Court: Supreme Court of India
Date of Decision: 2 July 2026
Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Area of Law: Judicial Ethics, Artificial Intelligence in Courts
Introduction
The Supreme Court’s ruling in Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd. is one of the most crucial decisions by the Indian judiciary concerning the responsible employment of artificial intelligence (AI) in the law. While the resolution is based on the insolvency case, the importance of the ruling is not because of the decision of the National Company Law Tribunal (NCLT) or the National Company Law Appellate Tribunal (NCLAT), which relied on fake AI-generated precedents.
It is essential because the Supreme Court had not only to rule on the correctness of the insolvency decision but also establish whether judicial rulings based on fake precedents can be upheld in law.
III. Facts of the Case
Pan India Utilities Distribution Company Ltd. (PIUDCL) had received substantial financial assistance from Jammu and Kashmir Bank Ltd. Essel Infraprojects Ltd. (EIL), in which the appellant, Pooja Ramesh Singh, was a director, executed a corporate guarantee in favour of the bank to cover these loans. When PIUDCL defaulted in repayment, the bank initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code against EIL before the National Company Law Tribunal.
The appellant argued against the maintainability of the insolvency proceedings on the ground that the corporate guarantee was extinguished subsequent to the restructuring and sanction documents. However, the NCLT dismissed these objections and allowed the insolvency application. The NCLAT upheld the verdict on appeal.
At the Supreme Court, the appellant pointed out that the NCLT relied on several judgments that were either non-existent or contained paragraphs that were never delivered by the respective courts. Verification by the Supreme Court revealed that many of the citations were fake while those that were not were associated with correct judgments but carried non-existent paragraphs attributed to them. The Court held that these judgments were created using Artificial Intelligence without human verification, thereby polluting the process of adjudication.
Legal Issues
The Supreme Court examined some crucial issues which are stated below:
Whether the judgments of NCLT/NCLAT founded on AI-created fictitious or imagined precedents can be upheld by law.
Whether the employment of fake judicial authorities impairs the sanctity of justice system.
Whether advocates and judges owe a responsibility to investigate AI-based judicial authorities before using them.
What institutional mechanisms need to be in place for effective utilization of AI going forward in the courtroom.
Arguments Presented
Appellant’s Arguments
The appellant claimed that the challenged order was invalid as it was based on court decisions that were either non-existent or misquoted. The use of such spurious legal precedents took away the chance of a fair hearing from the appellant and made the order legally invalid. It was also claimed that court decisions must be based on true legal sources and AI-created illusions could not be used instead of an authentic precedent.
Respondents’ Arguments
The bank’s representatives defended the order based on the validity of the insolvency process and argued that the corporate guarantee was valid. Even if some citations were incorrect, the reasoning given by the tribunals was sound. Therefore, the respondents urged the Court not to annul the proceedings due to wrong citations.
Court’s Reasoning and Analysis
The Supreme Court made it clear that judicial decisions must be based only on genuine legal authorities. The Court also stated that Artificial Intelligence has now become a reliable and useful technology, capable of helping judges and lawyers with legal research. However, AI systems may “hallucinate,” producing bogus judgments (where the AI produces a judgment that sounds like it should be real), incorrect references, or made-up quotations that sound real but are not real.
The Court emphasized that AI should only operate as an assistive technology and should never substitute for human legal judgment. The concept of “human in the loop” was introduced (meaning that every responsible AI must be verified privately before it is cited).
The Court examined the list of authorities cited by NCLT independently and found many cases where the judgments did not exist, paragraphs were fictitious, or real cases were mis-cited.
In its zero-tolerance approach to fake AI-created cases, the Court held that any lawyers who make use of fake law are acting illegally. It also stated that any judges who take advantage of rulings made by AI are committing serious legal violations. Any ruling made using false precedents cannot be considered a court ruling because it violates the law.
The Court understood the importance of the matter and instructed the Bar Council of India to create a group of experts who should provide legal guidelines for the usage of technology in legal practice and establish punishments for violating these rules. Thus, the Court emphasized that although the use of technology is encouraged in the field of law, it is people who are held accountable for the correctness of judgments.
VII. Judgment & Ratio Decidendi
The appeal submitted in the Supreme Court has been approved and both the NCLT and NCLAT have been overturned by the Supreme Court. The insolvency plea raised under Section 7 of the Insolvency and Bankruptcy Code has been remitted back to the NCLT for fresh consideration on its own merits with an independent Bench constituted. Until the time it gets re-considered, both the parties have been directed to maintain the status quo.
RATIO DECIDENDI
A judicial pronouncement based on AI-generated counterfeit, falsified, or hallucinated citations can never be termed as a judicial pronouncement. Lawyers and courts have a positive duty to check each AI-generated legal authority before relying on it. AI can assist judicial procedures but cannot replace human verification and judgement.
VIII. Critical Analysis
This ruling is anticipated to serve as a defining moment in the progression of India’s legal system regarding Artificial Intelligence and justice. Instead of completely rejecting AI, the Supreme Court follows a reasonable method of assessment, acknowledging the great benefits of AI technology while simultaneously calling for the presence of humans during AI implementation.
What stands out in this ruling is the irrefutable assurance of accountability in the legal system. By stating that rulings based on false references are no longer legal, the court reaffirmed the necessity for judgments to be based on the law, rather than on algorithms. The instructions given to the Bar Council of India further display the commitment of this legal body to the development of ethics before AI gets too involved in the area of law.
At the same time, some issues remain unaddressed in the judgment. For instance, there are no guidelines concerning the acceptable tools of AI, means to verify the information obtained by AI, or the institutional procedures courts are to carry out when using AI technology for research purposes. Therefore, in order to set up a proper governing system, future lawsuits and legislative actions are necessary.
In spite of its drawbacks, the judgment constitutes a landmark moment in Indian legal history, showing that technology cannot undermine constitutional values, ethical norms, and accountability in the judiciary overall. What it proposes is that AI must operate within the framework of human judgment and the law.
Conclusion
The ruling of the Supreme Court in the case of Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd. lays down a vital constitutional and moral architecture for the future implementation of Artificial Intelligence by Indian courts. In finding that judicial decisions based on the false AI-generated precedents are void in law, the court has reaffirmed the necessity of accuracy, authenticity, and human responsibility in dispensing justice. Here, the ruling is successful in striking a balance between technological development and judicial accountability by permitting AI as a helping hand but requiring that checks by human beings have taken place at all stages. As Artificial Intelligence technologies are becoming an integral part of the legal practice in India, the ruling represents the first precedent with respect to the ethical and responsible use of Artificial Intelligence in the Indian system of justice.
Bibliography (OSCOLA)
Table of Cases
Pooja Ramesh Singh v Jammu and Kashmir Bank Ltd & Anr 2026 INSC 668.
Legislation and Rules
Insolvency and Bankruptcy Code, 2016
Section 7
Section 14
Bar Council of India Rules (Standards of Professional Conduct and Etiquette). (Relevant because the Supreme Court directed the BCI to frame AI-use guidelines.)
Reports / Official Materials
Supreme Court of India,
Pooja Ramesh Singh v Jammu and Kashmir Bank Ltd, 2026 INSC 668 (Official Judgment)
Solicitors Regulation Authority (UK),
Approval of Garfield Law Ltd (AI-powered law firm). (Expressly referred to by the Supreme Court while discussing AI in legal practice.)
Secondary Source
Richard Susskind, Tomorrow’s Lawyers: An Introduction to Your Future (3rd edn, OUP 2023).
