Supreme Court quashes Rs 425-crore customs penalty after finding AI-hallucinated case laws The Supreme Court of India quashed a Rs 425-crore customs penalty after discovering that the lower court's judgment relied on case laws that were either non-existent, had fake citations, or did not support the legal propositions attributed to them, an apparent 'hallucination of AI.' Supreme Court quashes Rs 425-crore customs penalty after finding AI-hallucinated case laws SC found that some of the cases were non-existent or carried fake citations, while others that did exist did not lay down the legal propositions attributed to them — an apparent “hallucination of AI.”