Judgments that do not exist turned up in the appellants’ compilation, and the Supreme Court Flags AI-Generated Fake Judgments even as it upholds the admission of insolvency proceedings against two companies that run hotels in Bengaluru and Pune.
New Delhi: Dismissing the appeals of Deepak Raheja and another against the admission of insolvency proceedings, the Supreme Court has described as an “undesirable incident” the filing of a compilation of judgments that was found to contain AI-generated judgments that do not exist, and has allowed the corporate insolvency resolution process (CIRP) to go ahead against both companies [Deepak Raheja and Another v. Omkara Assets Reconstruction Private Ltd. and Another].
Justice Dipankar Datta and Justice Augustine George Masih delivered the judgment on 15 October 2026. Senior Advocates C. Aryama Sundaram and Arunabh Chaudhary, with Advocate-on-Record Farrukh Rasheed, appeared for the appellants, and Advocate Abhishek Anand and Advocates-on-Record Mandeep Kalra and Kanika Singhal were among the counsel for the respondents.
The compilation
The respondents objected at the outset that the appellants’ compilation included judgments that did not exist. Questioned by the Bench, the Advocate-on-Record sought to place the responsibility on the appellants, saying he did not know what the compilation contained. Senior counsel for the appellants later accepted responsibility and apologised on their behalf. The Court first considered imposing exemplary costs, but dropped the proposal on being told that the first appellant had died, and ordered no costs.
The Court has taken a strict view of such citations in earlier matters, among them the case in which it set aside NCLT and NCLAT orders in the Essel Infraprojects insolvency case after finding reliance on fake AI-generated precedents.
The appeals and the two companies
The appeals came out of insolvency petitions against GSTAAD Hotels Pvt. Ltd., which operates a JW Marriott in Bengaluru, and Neo Capricorn Plaza Pvt. Ltd., which operates a Crowne Plaza in Pune. In December 2017 the two companies jointly obtained facilities of Rs 600 crore from Piramal Finance Ltd., and they later took additional facilities under the Emergency Credit Line Guarantee Scheme. The facilities were assigned to Omkara Assets Reconstruction Pvt. Ltd., which approached the National Company Law Tribunal (NCLT) in March 2023 alleging default.
The NCLT admitted the petitions under Section 7 of the Insolvency and Bankruptcy Code, 2016, and the National Company Law Appellate Tribunal (NCLAT) upheld that decision. Before the Supreme Court, the appellants said that arrangements for managing hotel revenues and debt-servicing funds had not been properly considered, that the dues were miscalculated and that their businesses were profitable.
Default, not exact reconciliation
On the merits, the Court held that at the admission stage a financial creditor must show default through a summary assessment of documents and not an exact reconciliation of the debt. Once the threshold in Section 4 of the Code is met, disputes over the precise amount, whether on interest, penal charges or accounting entries, do not stand in the way of admission.
The trigger for initiation of the CIRP is the occurrence of a default.
An authenticated record of default from an Information Utility, the Court added, carries a presumption of high evidentiary value that only clear, cogent, credible and compelling material can rebut, while other documents such as loan agreements, account statements and acknowledgements of liability are assessed together. The appeals were dismissed, the NCLT admission and the NCLAT decision were upheld, and the CIRP against both companies was directed to proceed in accordance with law.
What the judgment shows
Fake citations can surface even in routine commercial appeals, and the Court will call out the lawyers involved even where the outcome turns on other grounds. On the law, the judgment reaffirms that admission under Section 7 turns on the existence of default and not on a minute reconciliation of the amount due, and that an Information Utility record is strong evidence of default.
Case Title: Deepak Raheja and Another v. Omkara Assets Reconstruction Private Ltd. and Another
Bench: Justice Dipankar Datta and Justice Augustine George Masih, Supreme Court of India
Date of Judgment: October 15, 2026
Appearances: Senior Advocates C. Aryama Sundaram and Arunabh Chaudhary with Advocate-on-Record Farrukh Rasheed for the appellants; Advocate Abhishek Anand and Advocates-on-Record Mandeep Kalra and Kanika Singhal for the respondents