Insolvency Admission of Two Hotel Companies Upheld Despite AI-Fabricated Citations, Rules Supreme Court

Insolvency Admission of Two Hotel Companies Upheld Despite AI-Fabricated Citations, Rules Supreme Court in Deepak Raheja v. Omkara Assets Reconstruction Private Limited

Case: Deepak Raheja and Another v. Omkara Assets Reconstruction Private Limited and Another
Citation: 2026 INSC 1134
Date of Judgment: 15 October 2026
Court: Supreme Court of India
Coram: Justice Dipankar Datta and Justice Augustine George Masih
Proceedings: Appeals against admission of Corporate Insolvency Resolution Process against two hotel companies

Court Observation

“On behalf of the appellants, a compilation of judgments was placed on record to which the respondents raised immediate serious objection. According to them, the compilation was replete with AI generated nonexistent judgments.”

Summary

The appellants challenged the admission of Corporate Insolvency Resolution Process (CIRP) against two companies that operate hotels in Bengaluru and Pune, after loans originally extended by Piramal Finance defaulted and Omkara Assets Reconstruction Private Limited initiated proceedings.

The Supreme Court dismissed the appeals and upheld the orders admitting insolvency, allowing the resolution processes to continue in accordance with law. Separately, the Court flagged as an “undesirable incident” the fact that the appellants) compilation of judgments contained AI-generated judgments that do not exist. It considered imposing exemplary costs, but ultimately ordered no costs after being informed that the first appellant, Deepak Raheja, had passed away.

Key Holdings

  • The NCLT is not required to determine the precise outstanding liability before admitting an insolvency application; the orders admitting CIRP against both companies were upheld.
  • Filing a compilation of judgments replete with AI-generated, non-existent judgments is an “undesirable incident”; the Court censured the Advocate-on-Record for attempting to shift responsibility for the compilation onto the clients.
  • Senior counsel for the appellants accepted responsibility and apologised on their behalf; exemplary costs were proposed but not imposed, with no order as to costs.

Directions Issued

  • The Corporate Insolvency Resolution Processes against both companies are to continue in accordance with law; pending applications were disposed of.

Background

Omkara Assets Reconstruction Private Limited initiated insolvency proceedings 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, following defaults on loans originally extended by Piramal Finance. The appellants, including Deepak Raheja, challenged the admission of CIRP before the Supreme Court.

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Disclaimer: This is a summary prepared for informational purposes only and does not constitute legal advice. Readers should refer to the official judgment for the authoritative text.