Supreme Court Criticises Lawyer for Blaming Client Over AI-Generated Fake Judgments

The Supreme Court of India has criticised an Advocate-on-Record for attempting to shift responsibility onto clients after a compilation of judgments filed on their behalf was alleged to contain non-existent decisions generated using artificial intelligence (AI). The Court made the observation while dismissing appeals challenging insolvency proceedings against two hotel-operating companies.

A Bench of Justice Dipankar Datta and Justice Augustine George Masih delivered the judgment on October 15, 2026, and upheld the orders initiating the Corporate Insolvency Resolution Process (CIRP) against both companies.

Background

The appeals arose from insolvency proceedings initiated by Omkara Assets Reconstruction Private Limited against GSTAAD Hotels Private Limited, which operates the JW Marriott Hotel in Bengaluru, and Neo Capricorn Plaza Private Limited, which operates the Crowne Plaza Hotel in Pune.

The companies challenged the admission of insolvency applications by the National Company Law Tribunal (NCLT), Mumbai, and the subsequent decision of the National Company Law Appellate Tribunal (NCLAT). Their arguments included disputes concerning loan repayments, interest calculations, cash-flow arrangements and the treatment of funds maintained for servicing debt.

While concluding the matter, the Bench addressed an incident involving the compilation of judgments submitted by the appellants. The respondents objected that it contained AI-generated, non-existent judgments.

The Court recorded:

"According to them, the compilation was replete with AI generated non-existent judgments. Advocate-on-Record for the appellants, facing the Court’s query, sought to shift the entire blame on the appellants while at the same time feigning ignorance of what the compilation contained."

The senior counsel appearing for the appellants subsequently accepted responsibility and sought forgiveness on their behalf. The respondents had also objected to the appeals being heard on merits in view of the incident. The Court nevertheless proceeded to examine the substantive challenges while keeping that objection open.

The judgment further records that the Court had initially proposed exemplary costs over the incident. However, after being informed of the death of the first appellant, Deepak Raheja, the Bench deleted the direction requiring payment of costs.

On the merits, the Supreme Court held that the insolvency applications could be admitted once the existence of financial debt and default above the statutory threshold had been established. It clarified that disputes over the precise amount outstanding do not, by themselves, prevent admission of an insolvency application.

The Court dismissed both appeals, upheld the NCLT orders as affirmed by the NCLAT, and directed that the insolvency resolution processes concerning both companies proceed in accordance with law.

It made no order as to costs.