AUTHOR: LAKSHAYA.A, A STUDENT AT VEL TECHRANGARAJAN DR.SAGUNTHALA R&D INSTITUTE OF SCIENCE AND TECHNOLOGY
TO THE POINT
AI systems become more widely used, their decisions are beginning to have real consequences for individuals . It is being used to make or support decisions in areas like banking, healthcare, employment and public services. But what happens when an AI system makes a wrong decision and someone suffers because of it?
That brings us to the main question of this topic: Who should be held responsible for a decision made by AI? Should it be the person who developed it, the company that used it, or the human who relied on its output?
Since AI cannot currently be held responsible like a human being, finding the right person or organisation to bear legal liability is a growing challenge. This presentation looks at how Indian law deals with such situations, who can potentially be held liable, and whether India needs clearer laws specifically addressing AI-related liability.
USE OF LEGAL TERMS:
Legal Liability :
Legal responsibility for harm or loss caused.
Accountability :
Responsibility for actions and their consequences.
Negligence :
Failure to exercise reasonable care.
Consumer Protection :
Legal protection against defective goods, deficient services and unfair practices.
Data Protection :
Legal safeguards concerning the collection, processing and use of personal data.
Privacy :
Protection against unlawful or unjustified interference with personal information.
THE PROOF
Artificial Intelligence is now being used for many decisions that can affect a person’s life. It may help decide whether someone receives a loan, gets selected for a job, receives medical assistance, or is provided with a particular service. When such a system gives a wrong or unfair result, the real difficulty begins: who should be answerable for that mistake?
The problem becomes more complicated because an AI decision is usually not made by one person. Developers create the system, organisations provide the data, companies deploy it, and human beings may rely on its output. If something goes wrong, responsibility can therefore be spread across several people or organisations.
Another important issue is the “black box” problem. Sometimes, even the people using an AI system may not be able to clearly explain why it produced a particular result. This creates a legal difficulty because proving negligence, causation and responsibility becomes harder when the reasoning behind the decision is unclear. NITI Aayog has specifically connected the lack of explainability with difficulties in auditing and determining liability.
India has already started addressing these concerns through responsible-AI principles such as safety, equality, non-discrimination, privacy, transparency and accountability. More recently, the Government’s 2026 techno-legal AI governance approach has emphasised combining existing legal safeguards with technical controls and institutional mechanisms rather than relying on technology alone.
Therefore, the issue is not whether AI should be blamed like a human being. The real legal question is which person, company or organisation should bear responsibility when an AI system causes harm. This makes AI liability an emerging area of Indian law, where traditional concepts such as negligence, duty of care, causation, product liability and accountability may have to be applied to new technological situations.
ABSTRACT
Artificial Intelligence is changing the way decisions are made in many important areas, including healthcare, banking, employment and public services. While AI can make decisions quickly and efficiently, it can also produce incorrect, unfair or harmful results. This creates a difficult legal question: when an AI-made decision causes harm, who should be held responsible?
The issue becomes more complicated because an AI system may involve several people and organisations, such as developers, data providers, companies and users. Finding the person responsible for an AI-related mistake can therefore be difficult.
This topic examines how existing Indian legal principles such as negligence, duty of care, product liability, privacy, consumer protection and accountability can be applied when AI causes harm. It also considers whether the existing legal framework is sufficient or whether India needs clearer rules specifically dealing with AI-related liability. The main objective is to understand how technological innovation can be encouraged while ensuring that human rights are protected and responsibility is not lost when decisions are made through AI.
CASE LAWS
1. Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd. & Anr., 2026 INSC 668
In this case, the Supreme Court dealt directly with the problem of AI-generated information being relied upon in legal decision-making. The tribunal had relied on non-existent and AI-generated “precedents” as though they were genuine authorities. The Supreme Court set aside the decision and stressed that AI can be used to assist legal work, but human beings must retain control over judicial decision-making. The Court also made it clear that advocates have a responsibility to verify AI-generated material before presenting it before a court.
The case is important for AI liability because it shows that AI cannot simply replace human responsibility. If an AI system produces incorrect information, the person who relies on it cannot escape responsibility by saying that “the AI gave the answer.” The Supreme Court emphasised accountability and human oversight in the use of AI in adjudication.
2.IndiaMART InterMESH Ltd.v.OpenAI Inc.& Ors., Calcutta High Court, 20 May 2026
This case dealt with claims regarding how ChatGPT generated and presented information about IndiaMART.
IndiaMART claimed that ChatGPT’s responses could harm its business and raised concerns under the Information Technology Act, trademark laws, unfair trade practices, and other legal principles.The court considered whether ChatGPT should be classified as an “intermediary” or an “originator” under the Information Technology Act, 2000.
The court noted that current generative AI systems do not easily fit into the legal framework established before these technologies were developed.
It pointed out that future laws may need to clearly define and assign responsibility among AI developers, platforms, and users based on their level of control and involvement.In the end, the court denied the interim relief that IndiaMART had requested
CONCLUSION
Artificial Intelligence has the potential to make our lives and decision-making processes faster and more efficient, but it also creates new legal challenges. When an AI system makes a wrong or harmful decision, simply blaming the technology is not enough.
The real issue is to identify who created the system, who used it, who had control over it, and who failed to prevent the harm. Indian law already provides several principles, such as negligence, duty of care, consumer protection, privacy and product liability, which can help address these situations. However, AI is developing faster than the law, and existing rules may not always provide a clear answer.
Therefore, India needs a legal approach that encourages AI innovation while ensuring human oversight, transparency and accountability. No person should be left without a remedy merely because an AI system was involved in causing the harm.
FAQs
1.Can AI itself be held legally responsible for a wrong decision?
At present, AI is generally not treated as a legal person that can independently bear legal responsibility.
2. Who can be held responsible when AI causes harm?
There is no single answer. It depends on who developed the system, who controlled or deployed it, how it was used, and what caused the harm.
3. What if an AI system makes a biased or discriminatory decision?
An AI system should not be allowed to become a reason for unfair treatment. If its decision results in discrimination, the responsible organisation may have to explain how the system was designed and used and whether reasonable steps were taken to prevent such bias.
4. Does India have a specific law dealing with AI liability?
India does not currently have one comprehensive law that decides liability for every type of harm caused by AI.
5. Why is human responsibility important when AI makes the decision?
AI systems are developed, operated and relied upon by human beings and organisations.” If humans completely avoid responsibility by saying “the AI made the decision,” victims may be left without an effective remedy.
