Supreme Court flags AI-generated fake judgments in insolvency appeal

This case involves two statutory appeals under the Insolvency and Bankruptcy Code, 2016, challenging the admission of Corporate Insolvency Resolution Processes (CIRP) against GSTAAD Hotels Pvt. Ltd. and Neo Capricorn Plaza Pvt. Ltd. The core issue is whether the financial debt claimed by the Financial Creditor, Omkara Assets Reconstruction Private Ltd., was in default and whether the admission of the insolvency petitions was legally justified.

Who it concerns: Appellants: Deepak Raheja and Another; Respondents: Omkara Assets Reconstruction Private Ltd. and Another; Bench: Justice Augustine George Masih.

What the court decided

• The Court disposed of the appeals by a common judgment.
• The Court affirmed the orders of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) that admitted the insolvency petitions.
• The Court upheld the finding that a financial debt exceeding the statutory threshold existed and was in default.
• The Court rejected the appellants' arguments regarding the Cash Management Agreement (CMA), Debt Service Reserve Account (DSRA), and the computation of the default amount.
• The Court held that the right to recall the loan had accrued and that the appellants failed to demonstrate solvency.

Also in the document

• The judgment is marked as 'REPORTABLE'.
• The Court noted that the Appellate Tribunal had previously remanded the matter for fresh consideration, but the Adjudicating Authority again admitted the petitions after hearing the parties.
• The Court observed that the appellants' own review reports did not find fault in the computation of the default amount, only questioning the interest rate.