The case centers around a dispute between Sammaan Capital Limited, a non-banking financial company, and Mantri Infrastructure Pvt. Ltd., a real estate firm. Mantri Infrastructure had obtained loans from Sammaan Capital by pledging shares but defaulted on repayments. In September 2024, Sammaan Capital issued a notice seeking the transfer of the pledged shares. In response, Mantri Infrastructure filed a commercial suit in the Bengaluru Commercial Court, seeking a permanent injunction to prevent the transfer. However, on October 1, 2024, they withdrew this suit without obtaining the court's permission to refile and subsequently filed a similar suit in the City Civil Court, Bengaluru.
Samman Capital challenged the jurisdiction of the civil court, arguing that the matter was commercial in nature and should be heard by the commercial court. The civil court judge dismissed this application on November 25, 2024, referencing two Supreme Court decisions—'M/s. Jalan Trading Co. Pvt. Ltd. vs. Millenium Telecom Ltd.' and 'M/s. Kvalrner Cemintation India Ltd. vs. M/s. Achil Builders Pvt. Ltd.'—to support the decision. However, these judgments were found to be non-existent.
Justice Devdas highlighted the gravity of the situation, noting that the judge's reliance on fabricated judgments was "disturbing" and warranted further investigation. He emphasized that neither party's counsel had cited these fictitious cases, raising serious questions about the judge's conduct. Consequently, he ordered that a copy of his order be placed before the Chief Justice for appropriate action against the judge.
This incident has sparked a broader discussion within the legal community about the reliability of legal research tools, particularly those powered by artificial intelligence. Senior advocate Prabhuling K Navadgi, representing Sammaan Capital, suggested that the erroneous citations might have resulted from AI-generated research, which can sometimes produce fictional results. He remarked, "It happens sometimes when one uses artificial intelligence and chatbots such as ChatGPT; AI might generate fictional results. It sometimes makes things up." This underscores the need for legal professionals to exercise caution and verify the authenticity of case law references obtained through AI tools.
The High Court's order also addressed procedural irregularities in how Mantri Infrastructure handled its legal strategy. After withdrawing the initial commercial suit without the court's permission, the company filed a similar suit in the civil court, which the High Court deemed inappropriate. Justice Devdas observed that the application filed by the defendants to return the plaint should have been allowed, citing the plaintiffs' failure to seek leave of the court while withdrawing the initial suit and the improper inclusion of certain parties in the subsequent suit. He remitted the matter to the 9th Additional City Civil and Sessions Judge, Bengaluru, directing the plaintiffs to file an application seeking rejection of the suit.
This case highlights the critical importance of accuracy and integrity in judicial proceedings. The reliance on non-existent legal precedents not only undermines the credibility of the judiciary but also jeopardizes the fairness of legal outcomes. As the legal profession increasingly incorporates advanced technologies like artificial intelligence, this incident serves as a cautionary tale about the potential pitfalls of uncritically accepting AI-generated information. Legal practitioners are reminded of their responsibility to diligently verify sources and ensure the reliability of the information they present in court.