Artificial Intelligence (AI) has become an important feature of contemporary life, including communication, healthcare, education, administration and social interaction. In healthcare, AI-assisted diagnosis, virtual counselling, behavioural analysis and mental-health applications may improve access, affordability and early identification of psychological concerns, particularly in India, where mental-health care continues to face social stigma and infrastructural limitations. However, increasing reliance on AI-driven systems has also generated serious concerns relating to psychological vulnerability, autonomy, privacy and human dignity. Algorithmic social media, targeted advertising, addictive interface design, behavioural surveillance and emotional profiling may influence choices, reduce attention spans, weaken social engagement and aggravate anxiety, loneliness and overdependence on technology. This paper critically examines the relationship between Artificial Intelligence and mental health in light of Article 21 of the Constitution of India. Relying on Sukdeb Saha v. State of Andhra Pradesh, where the Supreme Court recognised mental health as an integral component of the right to life and dignity, the paper argues that the psychological impact of AI must be treated not merely as a technological or public-health issue, but also as a constitutional concern. The study adopts a doctrinal and interdisciplinary approach to analyse the benefits, risks, opportunities and legal challenges arising from the use of AI in mental-health contexts. It further considers how AI-mediated decision-making, data processing and digital dependence may affect individual liberty and psychological well-being. It concludes that AI can strengthen mental-health support and healthcare delivery only when its development and deployment are guided by dignity, privacy, autonomy, accountability, human oversight and protection of fundamental rights.