Matribhumi Samachar English
Mumbai. Thursday, 4 June 2026
Artificial Intelligence (AI) is transforming the corporate landscape, but its sudden, unverified intrusion into the legal system is sending shockwaves through the Indian judiciary. In a unprecedented development, the Delhi High Court stayed a trial court order directing SNV Aviation Private Limited (the parent entity of Akasa Air) to pay ₹1.08 crore in damages to a local travel agency.
The suspension comes after alarming evidence surfaced indicating that the lower court’s decision was heavily anchored in AI-generated legal concepts and phantom case laws that simply do not exist in the Indian legal framework.
The Root of the Dispute: A Commercial Fallout
The litigation originated from a commercial friction between Akasa Air and a Delhi-based tour operator, ABS Tour and Travels.
In April 2023, the travel agency booked 640 seats on Akasa Air flights connecting Delhi and Goa for the peak winter holiday season (December 23, 2023, to January 13, 2024). The agency paid an advance sum of ₹4,82,640 via the airline’s portal, securing Passenger Name Records (PNRs) for the bulk bookings.
A month later, Akasa Air unilaterally cancelled the slots, citing the travel agency’s non-compliance with structural pre-deposit parameters defined in their ticketing terms. While Akasa Air eventually returned the principal advance amount by August 2023, ABS Tour and Travels approached the Saket District Commercial Court, claiming devastating losses of business profits due to the sudden cancellation.
On February 24, 2026, District Judge (Commercial)-02 Lalit Kumar ruled against the airline, ordering them to pay ₹1,08,80,000 to the travel agent as compensation for “loss of profits.”
Unmasking the AI Intrusion: What the High Court Found
When Akasa Air appealed the verdict under Section 13 of the Commercial Courts Act, 2015, their legal council targeted the very fabric of how the judgment was constructed. The airline subjected the lower court’s text to multiple digital AI-detection systems, which returned staggering flags of artificial generation.
A Division Bench comprising Justice Prathiba M. Singh and Justice Madhu Jain scrutinized the trial court’s order and affirmed that there was a distinct prima facie (at first sight) indication of unverified machine intervention.
1. Hallucinated Doctrines and Fabricated Precedents
The primary alarm bell was the text’s reliance on fake legal principles. The judgment cited synthetic legal doctrines and attributed completely false legal propositions to historic Supreme Court rulings.
AI models are infamous for “hallucinating”—generating highly authoritative-sounding facts or citations that are entirely fictional. The High Court warned that attributing non-existent definitions to the highest court of the land constitutes a critical hazard to the integrity of the adjudicatory process.
2. Illogical Mathematical Faults in Profit Calculations
Beyond the artificial language patterns, the High Court identified a glaring legal correction regarding the computation of commercial damages.
The trial court calculated the ₹1.08 crore payout by taking the estimated gross market value of the tickets during peak season (~₹17,000 per seat) and multiplying it by the 640 cancelled seats.
Incorrect Profit Logic = 640 Seats × ₹17,000 (Gross Seat Value) = ₹1,08,80,000
The High Court pointed out that this formula is completely unsustainable in commercial law. The trial court treated the entire gross ticket value as pure profit, fundamentally ignoring that the travel agent would have had to pay Akasa Air the baseline procurement costs for those seats. Gross revenue can never be conflated with net profit margins.
Status and Precedents: What Lies Ahead?
The Delhi High Court has officially stayed the execution of the lower court’s decree. To protect both parties while a comprehensive analysis takes place, Akasa Air was directed to deposit a temporary buffer of ₹20 lakhs with the court’s Registrar General.
The Bench has ordered a complete pull of both the physical and digital records from the Saket District Court to trace the exact workflow used to generate the ruling. The case has been scheduled for a definitive evidentiary review on August 20, 2026.
The Supreme Court Guardrail: This isn’t an isolated anxiety. In February 2026, the Supreme Court of India took strict cognizance of trial courts leaning on AI-generated text containing fake citations. The Apex Court warned that passing orders based on non-existent machine data is not merely an intellectual oversight—it can actively amount to judicial misconduct.
As Indian legal bodies sprint to draft structural guidelines for deploying generative software safely, this case stands as a landmark warning: AI can assist with text organization, but leaving it to run without strict, expert human validation can dismantle the rule of law.
Media & External Assets
Below is a visual representation of how artificial intelligence risks compromise strict data standards when deployed without safeguards:
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