Andhra Pradesh High Court – Amravati
P V Mudhun Reddy Peddireddi Venkata … vs The State Of Andhra Pradesh on 15 July, 2025
APHC010135872025
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3369]
(Special Original Jurisdiction)
TUESDAY, THE FIFTEENTH DAY OF JULY
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE T. MALLIKARJUNA RAO
CRIMINAL PETITION NO: 2904/2025
Between:
1. P V MUDHUN REDDY @ PEDDIREDDI VENKATA MIDHUN REDDY,
S/O P.RAMACHANDRA REDDY, AGED ABOUT 47 YEARS,
OCCUPATION MEMBERS OF PARLIAMENT, RESIDENT OF D.NO.1-
97, ERRATHIVARIPALLI, SODUM MANDAL, CHITTOOR DISTRICT
...PETITIONER/ACCUSED
AND
1. THE STATE OF ANDHRA PRADESH, Through SHO, C.I.D. Police
Station, Managalgiri. Represented by Public Prosecutor, High Court of
Andhra Pradesh, at Amaravathi.
...RESPONDENT/COMPLAINANT
Petition under Section 437/438/439/482 of Cr.P.C., and 528 of BNSS
praying that in the circumstances stated in the Memorandum of Grounds of
Criminal Petition, the High Court is pleased to direct the release of the
petitioner on bail in the event of his arrest in connection with the crime. No.21
of 2024 of C.I.D. Police Station, Mangalagiri, Guntur District, and to pass
IA NO: 1 OF 2025
Petition under Section 482 of Cr.P.C. and 528 of BNSS praying that in
the circumstances stated in the Memorandum of Grounds of Criminal Petition,
the High Court may be pleased
Counsel for the Petitioner/accused:
1. KALLA GUNA SEKHAR
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Crl.P.No.2904 of 2025Counsel for the Respondent/Complainant:
1. PUBLIC PROSECUTOR
The court made the following ORDER:
1. This Criminal Petition has been filed by the Petitioner/A.4 by invoking
the provisions of Section 482 of Bharatiya Nagarik Suraksha Sanhita, 2023
[for short, “BNSS’] Seeking pre-arrest bail in the event of his arrest in
connection with Crime No.21 of 2024, involving offences punishable under
Sections 420, 409, and 120-B of the Indian Penal Code, 1860 (for short,
‘I.P.C.’) registered at the C.I.D., Police Station, Andhra Pradesh, Mangalagiri.
During the investigation, Sections 7, 7A, 8, 13(1)(b) and 13(2) of the
Prevention of Corruption Act, 1988 (for short, ‘P.C.Act’) were added vide a
Memo dated 22.04.2025.
2. The case of the prosecution, as projected in the report, dated
23.09.2024 and subsequent Memo dated 22.04.2025 as contained in the
counter affidavit filed on behalf of the respondent-State, which are as follows:
i. On 23.09.2024 at 22:00 hrs, a report was received from Sri Mukesh
Kumar Meena, Principal Secretary, Government of Andhra Pradesh
(Memo No. Rev-01/CPE/20/2024-VIG-IV, dated 20.09.2024). It highlighted
alleged irregularities and corruption in APSBCL from October 2019 to
March 2024, referencing Government Memo No. Rev-01/P&E/Complaints/
2024 (09.09.2024) and a letter from the MD, APSBCL (Lr.No.APSBCL/
OFS/2024-25, dated 18.09.2024) with enclosures.
ii. Y. Venkateswara Rao Srinivas submitted a representation alleging
irregularities in APSBCL from October 2019 to March 2024. It was
forwarded to the MD, APSBCL for investigation, resulting in a detailed
report as per the second reference.
iii. After reviewing the records, the Committee found the irregularities,
which are as follows:
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Crl.P.No.2904 of 2025(1) Suppression of established popular brands and unfair discrimination in
the allocation of OFS (Order for Supply) over time led to the almost
complete disappearance of some brands from the market.
(2) Favourable and preferential allocation of orders to certain new brands in
violation of existing norms, thereby giving them undue market share
and competitive advantage.
(3) The procurement system was shifted to a manual process, giving scope
for manipulation in OFS against the previous automated OFS system,
compromising the process’s integrity.
iv. The MD, APSBCL, reported that the Committee reviewed OFS data from
2018 onward, as detailed in the annexures. However, the motive behind
the observed discrimination and procurement irregularities remained
unclear. The Committee recommended appointing an external specialised
agency for further investigation, which the MD supported. The report has
been reviewed, and given the gravity of issues, i.e., suppression of
brands, unfair discrimination, preferential allocation, and other violations,
further action is warranted.
v. Investigation reveals a large-scale liquor scam in Andhra Pradesh (2019-
2024), involving political figures, including the petitioner (a Lok Sabha
member), who allegedly facilitated a policy favouring select distilleries in
exchange for kickbacks, causing over ₹3,500 crores in losses. Following
the Court’s Order dated 03.04.2025 in Crl.P.No.2904/2025, A.1 was
arrested on 21.04.2025, and new material, including corroborated
evidence, links the petitioner as a key planner. A financial trail also
connects one liquor manufacturer to PLR Projects Pvt. Ltd., tied to the
petitioner and associates. The petitioner was named A.4 vide Memo dated
22.04.2025 before the III Additional District & Sessions Judge,
Vijayawada.
vi. It is denied that the petitioner is being targeted for political reasons. On
the contrary, evidence indicates he misused his position for personal and
allied financial gain, causing public loss. A summary of the 2019 -2024
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Andhra Pradesh liquor scam, based on the ongoing investigation, is
provided below:
a) The petitioner was the primary executor and instrumental in planning
and directing the entire operation. He, along with other accused,
planned the change in excise policy and also its modalities, to
ensure that he and others would receive large kickbacks, a large
portion of which was received in cash, gold bullion, etc. Furthermore,
he planned the routing/rotation of money from liquor
suppliers/manufacturers to himself/his family members, and
associates. An investigation is underway to unravel the multi-layered
financial transactions to identify all beneficiaries other than the
petitioner. His custodial interrogation is required for this purpose as
well.
b) The syndicate, led by the petitioner and co-accused, manipulated
sales, suppressed competitive brands, and controlled indenting
through direct communication with depot managers. Kickbacks,
averaging 20% per liquor case, were collected in cash or gold via
complex financial routes involving inflated invoices, fictitious
transactions, and shell companies. Funds were laundered through
bullion traders, promotional spends, and companies with links to the
petitioner (e.g., PLR Projects).
c) Evidence includes statements from 153 witnesses, financial records
of over 100 distilleries, and forensic data. Companies such as Adan
Distilleries, SPY Agro, Tilaknagar Industries, and Sharvani Alco
Brew received substantial payments from APSBCL despite lacking
requisite infrastructure or showing suspicious fund flows. Estimated
illicit gains exceed ₹3,500 crores. The investigation is ongoing to
trace layered transactions and identify final beneficiaries.
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d) Investigation has revealed the petitioner’s deep and central
involvement in the liquor scam, as evident from witness statements
(under Sections 161 & 164 CrPC), documentary and electronic
evidence, and financial records. The key findings are:
The petitioner was a core conspirator from inception to
execution, orchestrating policy changes and coordinating with co-
accused to secure kickbacks from distilleries/suppliers.
He induced public servant A.3 (Satya Prasad) with the promise
of Non-SCS IAS promotion, and ensured his appointment as
Special Officer to implement the conspiracy.
He directly influenced APSBCL officials (A2 & A3), participated in
multiple planning meetings, and issued instructions that led to
massive financial loss to the State.
Kickbacks were routed via entities like SPY Agro, Sanhoc Labs,
and Dcart Logistics, with ₹5 Crores credited to PLR Projects Pvt.
Ltd.–a company closely linked to the petitioner’s family.
The petitioner’s 2024 election affidavit discloses a ₹47.74 Crore
liability to PLR Projects Pvt. Ltd., confirming financial ties. Dcart
Logistics (from which PLR received ₹5 Cr) is directed by A.9, the
PA of A.1.
The petitioner also holds shares in Shiva Shakthi Dairy Pvt. Ltd..
In this PLR group entity, his mother and sister are directors,
reinforcing his connection to PLR and the illicit fund flow.
The transaction trail indicates the use of front/shell companies for
laundering kickbacks, warranting further investigation into
potential quid pro quo.
Post 03.04.2025, new witness statements (LWs.108, 113, 121)
further affirm the petitioner’s direct role in planning and executing
the scam.
vii. That under the directions of the Hon’ble Supreme Court dated
07.04.2025 in SLP (Cri) No.5218 of 2025, the petitioner was summoned
and did appear before the C.I.D., on 19.04.2025. However, during his
examination, the petitioner was non-cooperative, gave evasive answers,
and made misleading statements, thereby impeding the progress of the
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Crl.P.No.2904 of 2025investigation. His conduct is indicative of a deliberate attempt to obstruct
and derail the investigative process.
3. The case of the Petitioner/A.4, as set out in the petition and elaborated
in the reply affidavit, is as follows:
(a) The petitioner refutes the State’s claim that he is a “mastermind”
of the liquor scam, stating it is unsubstantiated and misleading. The petitioner
holds no executive or cabinet role, and witness statements are vague and
delayed. The repeated use of the term is unsupported by any concrete or new
evidence post the 03.04.2025 order. The FIR was registered in September
2024, yet statements under Sections 161 and 164 Cr.P.C., have been
recorded nearly seven months later, are vague, and appear to be coerced.
Notably, key witness statements (LW-18, 72, 90) do not mention the
petitioner, and others are generalised without specific attribution. No credible
material has been placed linking the petitioner to the alleged crime. Witness
statements cited are vague, obtained belatedly, and allegedly under coercion.
He highlights past instances where the High Court intervened to protect
witnesses and accused from harassment, including:
WP.No.8586/2025: Directors of Sharvani Alco Brew alleged coercion
and were granted legal safeguards during interrogation.
WP.No.10339/2025: A.1’s parents complained of threats and abuse by
investigating officers; the court ordered statements to be recorded at
home in the presence of counsel.
WP.No.9861/2025: Petitioner sought and received similar protection for
his interrogation, ordered to be conducted in the presence of his lawyer
and under CCTV.
WP.No.10008/2025: Habeas corpus petition revealed illegal detention
of A9’s relatives; Court ordered the detainee to be produced, confirming
misconduct.
In WP.No.11620 of 2025, the mother of Sk. Saif Ahamed sought
protection from harassment.
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(b) A political vendetta drives the prosecution. Following the action
taken against members of the current government, a retaliatory FIR was
registered. The petitioner is being targeted selectively, with no genuine
prosecutorial intent, only a desire to arrest and malign. The State falsely links
the petitioner to a ₹5 crore transaction between Dcart Logistics and PLR
Projects. Bank records show this was a business advance returned in October
2021. The Investigating Agency, despite having full knowledge of the
remittance, has suppressed this fact. The petitioner is neither a Director nor
responsible for PLR Projects’ operations, which the State itself acknowledged.
The petitioner cannot be held liable for its actions. Holding shares in Shiva
Shakthi Dairy Pvt. Ltd., which is not a subsidiary of PLR Projects, also has no
bearing on the present crime. Companies associated with the petitioner’s
family are cooperating with the investigation and submitting requisite
documents under BNSS notices. The Petitioner, being a Member of
Parliament, had no role in state excise decisions, promotions, or policy-
making. His alleged connection to the promotion of A.3 or liquor policy
changes is unfounded and irrelevant to his official duties. The alleged
irregularities stem from the 2014-2019 period, during which the current
regime favoured selected distilleries and manipulated the liquor store licensing
system. This led to a monopolistic syndicate controlling 80% of liquor stores,
resulting in losses to the state exchequer — a system the petitioner had no
role in formulating or implementing.
(c) Between 2019 and 2024, a reformed, state-controlled policy
aimed to reduce alcohol use, eliminate illicit shops, and ensure transparency
via e-payments and QR codes. Shop numbers were cut by 33%, illegal outlets
dismantled, and tax-based revenue rose without burdening manufacturers.
CAG audits confirmed a significant increase in excise revenue. Crime No.
18/2023 was filed against top officials for 2014-2019 irregularities; Crime No.
21/2024 allegedly mirrors it to dilute prior charges.
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(d) The Petitioner submits that Mr. Satya Prasad’s Section 164 CrPC
statement is vague and unreliable. The allegations against him are false and
politically motivated. No evidence or Memo linking him to the case has been
provided. As an MP, he had no role in excise policy formulation or APSBCL
operations, which are Cabinet-approved and implemented by officials.
Financial records show increased state revenue from 2019 to 2024, negating
claims of loss. Even if statements are accepted, no charges apply as he was
neither entrusted with property nor involved in inducement or conspiracy.
(e) The Petitioner argues that the criminal case stems from a political
vendetta and that his earlier apprehension of arrest was dismissed by the
State as speculative, which is contradicted by subsequent attempts to arrest
him. Despite earlier claims of no incriminating material, the State added him
as A.4 post 21.04.2025 and expanded charges under IPC and P.C.Act.
However, no fresh evidence justifies this escalation. The petitioner complied
fully with the Supreme Court’s directions, appeared for interrogation, and
answered all questions. Despite this, the State continues its attempt to arrest
him.
7. I have heard Sri T. Niranjan Reddy, learned senior counsel for the
Petitioner/A.4 and Sri Sidharth Luthra, learned senior counsel, representing
the Respondent-State assisted by Sri M. Lakshmi Narayana, learned Public
Prosecutor and Sri G. Neelothpal, learned Assistant Public Prosecutor and
perused the written submissions filed in support of their contentions. Both
sides reiterated their submissions on par with the contentions presented in the
Petition and written submissions. Consequently, the contentions raised by
learned counsel need not be reproduced.
8. The record reflects that the petitioner filed a pre-arrest bail application,
while the prosecution initially submitted that there was no material warranting
his arrest. This court, by Order dated 03.04.2025, dismissed the application,
observing that the investigation was at a nascent stage and there was no
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imminent apprehension of arrest, as the investigating officer had yet to assess
the sufficiency of evidence to array the petitioner as an accused in Crime
No.21 of 2024. Aggrieved, the petitioner filed SLP (Crl) No.5218/2025 before
the Hon’ble Supreme Court, which remitted the matter to this court for fresh
consideration.
9. The learned senior counsel for the petitioner requested this court to
dispose of the application in light of the following observations made by the
Hon’ble Supreme Court in its Order dated 13.05.2025 in SLP (Crl) No.5218 of
2025:
“12. Section 35 of the Bharatiya Nagrik Suraksha Sanhita, 2023
provides for arrest by a police officer without an order from a Magistrate
and without a warrant. The Section gives discretion to the police officer
who may, without an order from a Magistrate and even without a warrant,
arrest any person in the situations enumerated in that Section. It is open to
him in the course of investigation to arrest any person who has been
concerned with any cognisable offence or against whom reasonable
complaint has been made or credible information has been received or a
reasonable suspicion exists of his having been so concerned. He is not
expected to act in a mechanical manner and, in all cases, to arrest the
accused as soon as the report is lodged. In appropriate cases, after some
investigation, the Investigating Officer may make up his mind as to whether
it is necessary to arrest the accused person. At that stage, the court has no
role to play.
13. Since the power is discretionary, a police officer is not always bound
to arrest an accused even if the allegation against him is of having
committed a cognisable offence.
14. Since an arrest is in the nature of an encroachment on the liberty of
the subject and does affect the reputation and status of the citizen, the
power has to be cautiously exercised. It depends inter alia upon the nature
of the offence alleged and the type of persons who are accused of having
committed the cognisable offence. Obviously, the power has to be
exercised with caution and circumspection.”
18. xxx. However, this time the High Court may look into the
materials that may be shown to prima facie indicate the involvement of the
petitioner, if any, in the alleged offence. The issue of apprehension of
arrest being genuine or not now pales into insignificance. The High Court
shall now decide the plea of anticipatory bail afresh, keeping in mind the
well-settled principles of grant of anticipatory bail, of course, looking into
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the materials which the State may show to the High Court. It is for the High
Court to consider now whether there is any prima facie case made out
against the petitioner. Whether the action sought to be taken by the State
is on account of a political vendetta? All other grounds germane to the
consideration of the grant of anticipatory bail
10. The learned senior counsel for the petitioner submits that the
Constitution Bench decisions in Gurbaksh Singh Sibbia V. State of Punjab1
(paras 14, 15, 19, 26, 28, 31, and 33) and Sushila Aggarwal V. State (NCT
of Delhi)2 (paras 45-57, 63, 66, 71, 73, and 92) affirm the primacy of personal
liberty and lay down clear principles governing the grant of anticipatory bail. It
is argued that the petitioner’s case falls squarely within these parameters.
Further, it is contended that Section 482 of the BNSS mirrors the unamended
Section 438 of the Code of Criminal Procedure, 1973 (for short, ‘Cr.P.C.’). The
deliberate omission of factors such as the nature of the offence or the
accused’s antecedents indicates, according to counsel, the legislature’s intent
to confer broad, unfettered discretion on this Hon’ble Court under Section 482
BNSS.
11. The learned senior counsel for the petitioner further relied on the
judgment of the Hon’ble Supreme Court in Siddharam Satlingappa Mhetre
V. State of Maharashtra3, particularly paragraphs 91 and 109, wherein the
court held that although the power to grant anticipatory bail may be
characterised as “extraordinary,” this does not warrant the inference that such
power should be exercised only in exceptional circumstances. The court
emphasised that the power is discretionary and must be exercised based on
the facts and circumstances of each individual case. Consequently, it is not
necessary for the petitioner to establish a “special case” in order to invoke this
relief.
1
(1980) 2 SCC 565
2
(2020) 5 SCC 1
3
(2011) 1 SCC 694
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12. The learned senior counsel for the Respondent-State places reliance on
the decisions reported in Serious Fraud Investigation Office V. Aditya
Sarda4, wherein the Hon’ble Apex Court held that:
“18. Now, so far as anticipatory bail is concerned, this court has
consistently emphasised that anticipatory bail should not be granted as a
matter of routine, particularly in serious economic offences, involving large-
scale fraud, public money or complex financial crimes.
23. Given the above settled legal position, it is no more res integra that
economic offences constitute a class apart, as they have deep-rooted
conspiracies involving huge loss of public funds. Therefore, such offences
need to be viewed seriously. They are considered as grave and serious
offences affecting the economy of the country as a whole and thereby
posing serious threats to the financial health of the country.”
13. In light of the observations made by the Hon’ble Supreme Court in SLP
(Crl.) No.5218 of 2025, and considering the precedents cited above, this court
duly considers the submissions advanced by both parties.
14. At this stage, it is relevant to note that the learned senior counsel for the
Respondent-State submits that this court has already rejected anticipatory bail
to co-accused K. Dhananjaya Reddy (A.31) and P. Krishna Mohan Reddy
(A.32) in CRLP Nos.4837 and 4838 of 2025, respectively, by a common order
dated 07.05.2025. The rejection was based on the gravity of the allegations
and the necessity of custodial interrogation to confront the petitioners with the
material gathered. The Hon’ble Supreme Court, in SLP (Crl.) Nos.7532 and
7533 of 2025, affirmed this court’s view, holding that the High Court had not
erred in declining anticipatory bail and had exercised its discretion judiciously.
The learned senior counsel for the Respondent-State contends that the
petitioner cannot seek parity with unrelated matters or differently situated
accused, and the Hon’ble Supreme Court has already declined anticipatory
bail to similarly placed high-ranking officials in the same FIR (Crime No.21 of
2024).
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2025 SCC Online SC 764
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15. The learned senior counsel for the petitioner contends that the State’s
reliance on orders passed in the cases of A.31 to A.33 for examining the
petitioner’s case is misplaced. It is submitted that the Hon’ble Apex Court has
passed a specific order in the petitioner’s SLP, making the findings in the
petitioner’s case directly relevant, while the decisions in the third parties’ cases
are not binding on the petitioner. At this juncture, it is pertinent to refer to the
observations made by the Hon’ble Apex Court in SLP (Crl.) No.5218 of 2025
dated 13.05.2025, directing this court to look into the materials that may be
shown to prima facie indicate the involvement of the petitioner, if any”… and
that “the High Court shall now decide the plea of anticipatory bail afresh
keeping in mind the well-settled principles of grant of anticipatory bail, of
course, looking into the materials which the State may show to the High Court.
16. The case of the prosecution is that following the 2019 elections, the
government introduced a liquor policy vide G.O.Ms.No.357 (16.08.2019),
establishing 3,500 Government Retail Outlets (GROs) under APSBCL. The
policy, purportedly towards prohibition, however, the prosecution contends that
instead it facilitated State control over the liquor trade. A new excise policy
replaced the transparent, automated liquor procurement system with a
discretionary, email-based OFS mechanism under APSBC. This shift enabled
select distilleries, often shell companies or non-operational entities, to secure
supply orders in exchange for kickbacks. The manual override of the system
allowed the accused complete control of the liquor trade, eliminating
transparency.
17. It is the case of the Prosecution that APSBCL’s payment procedure
followed a discount policy for timely supplier payments. Still, MD Vasudeva
Reddy continued applying an outdated policy after the 2021 revised GO,
causing a financial loss to the government. Between June 2022 and March
2024, ₹200 crores was overpaid to suppliers, benefiting distilleries like Spy
Agro Industries and Leela Distilleries, as part of the ongoing kickback scheme.
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18. According to the prosecution, the scheme in question favoured select
liquor brands such as Adan and Leela, while sidelining well-established brands
like Pernod Ricard and McDowell. As a result, several distilleries either shut
down operations or diverted their products to other states.
19. The prosecution contends that an analysis of the financial accounts of
various distilleries and suppliers involved in the liquor business reveals that
these entities agreed to pay kickbacks at prescribed rates, based on the
category of liquor. Additionally, they were compelled to arrange regular cash
payments, which were channelled through the accounts of real estate
companies, shell companies, and other entities. A portion of the funds was
subsequently transferred to various accounts. The prosecution further states
that the investigation is still in its early stages and requires a thorough
examination of these transactions.
20. The allegations against the petitioner are that they were responsible for
the discontinuation of popular liquor brands and the promotion of favoured
brands. It is alleged that from 2019 to 2024, the syndicate illicitly amassed
approximately ₹3,200 crores through manipulation of the liquor distribution
market in Andhra Pradesh. They withheld orders for popular brands, applied
improper payment discounts, and circumvented new brand allocation
procedures, causing significant financial loss to both the government and well-
known liquor brands.
21. The prosecution has relied upon sale transactions presented in a tabular
form, and the details contained therein, prima facie, support the prosecution’s
case.
Brand Quantity in 2018-19 Quantity in 2023-24 McDowell's Brandy 22,73,086 5 Imperial Blue Whisky 20,21,955 7 Kingfisher Beer 1,02,47,566 11,82,388 Budweiser Beer 22,52,195 0 Brand Market share 2018-19 Market share 2023-24 14 TMR, J Crl.P.No.2904 of 2025 McDowell's Brandy 23.41% 2.15% Kingfisher Beer 29.5% 3.21% Budweiser Beer 11.43% 1.25% S.No. Name of the Brand Quantity Intended 1. Ocean Blue Whiskey 2,76,706 2. Daru House Whiskey 68,83,420 3. Supreme Blend Whiskey 77,35,400 4. Brilliant Blend Whiskey 37,30,800 5. 9 Sea Horse Whiskey 46,07,733 6. Andhra Gold Whiskey 20,61,711 7. Good Friend Whiskey 27,72,050 8. HD Whiskey 22,02,555
22. The learned senior counsel for the Respondent-State submits that the
proceedings before the Competition Commission of India (CCI) relate to the
period from 2019 to 2021. However, the allegations against the accused
extend from 2019 to 2024. This court finds considerable force in the
submission of the learned senior counsel for the Respondent-State that the
petitioner cannot place reliance on the CCI’s Order dated 19.09.2022, as its
scope is confined to the provisions of the Competition Act, 2002 and the Order
does not address or adjudicate upon any criminal offences that may arise from
the practices under scrutiny before the CCI. Given the detailed sales data of
various brands presented in tabular form, the prosecution’s allegations appear
to have a prima facie basis and cannot be rejected as unfounded.
23. Learned senior counsel for the Respondent-State submits that the
petitioner has misled this Hon’ble Court by concealing multiple antecedents,
specifically, six FIRs apart from the two disclosed in the petition. Such non-
disclosure of material facts, particularly prior criminal history, is a valid ground
for denial of anticipatory bail. In support, reliance is placed on Munnesh V.
State of U.P., wherein the Hon’ble Apex Court held that:
“9. Xxx since the petitioner has suppressed material facts with regard to
his involvement in criminal cases, he is not entitled to the discretionary
relief of bail.”
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24. In response, learned senior counsel for the petitioner submits that the
cases listed in the counter at Sl.Nos.I and II resulted in acquittals, Sl.No.III was
quashed, and Sl.No.IV was compromised before the Lok Adalat, rendering
them irrelevant to the present matter. Regarding Sl.No.V (Crime No.12 of
2017), it is contended that the FIR was politically motivated, arising from
YSRCP supporters raising slogans against the then Chief Minister. As for
Sl.No.VI (Para 3), the Respondent-State itself has recorded it as a ‘mistake of
fact’. Having considered these submissions, this court is not inclined to
consider the Respondent-State’s request in this regard.
25. Learned senior counsel for the petitioner submits that the prosecution’s
case is based on the allegation that PLR Projects received ₹5 Crores from D-
Cart Logistics, purportedly linked to the liquor transactions. However, the
material placed shows that the amount received by PLR in 2019 was
transferred to D-Cart only on 30.10.2021; the prosecution relies solely on the
statement of LW.113, who is a hearsay witness claiming to have learned that
the ₹5 Crores were returned to D-Cart for cash; beyond this uncorroborated
hearsay, there is no material linking the transaction to the alleged liquor scam;
moreover, it is an admitted fact that the petitioner holds no position either as
director or shareholder in PLR Projects.
26. The learned senior counsel for the petitioner argues that the statements
of LWs.18, 72, and 90 do not mention the petitioner’s name or role. The
statements of LWs.16, 19, 25, 26, 31, 41, 42, 47, 70, 80, 104, 106, 108, and
113 are vague and contain general allegations that cannot, in any way, be
considered prima facie evidence against the petitioner. The learned senior
counsel further contends that the anticipatory bail order dated 03.04.2025
indicates the investigation officer found the material insufficient to name the
petitioner as an accused at that time; the petitioner was only added as A.4 by
a memo dated 22.04.2025. Apart from recording the statements of LW.113 on
05.04.2025 and L.W.121 on 18.04.2025, no other material has been collected.
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This court views that the prosecution’s contention that the material collected
as of 03.04.2025 was insufficient to name the petitioner as an accused does
not preclude consideration of this material, especially if subsequent
investigation has collected some incriminating material against the petitioner.
Moreover, the learned senior counsel for the petitioner contends that the
statements of LWs.113 and 121 are hearsay and they cannot be considered.
27. The learned senior counsel for the petitioner placed reliance on the
decision reported in Kalyan Kumar Gogoi V. Ashutosh Agnihotri and
another5, wherein the Hon’ble Apex Court held that:
35. The term “hearsay” is used concerning what is done or written as well
as to what is spoken and in its legal sense, it denotes that kind of evidence
which does not derive its value solely from the credit given to the witness
himself, but which rests also, in part, on the veracity and competence of
some other person. The word “hearsay” is used in various senses.
Sometimes it means whatever a person is heard to say. Sometimes it
means whatever a person declares on information given by someone else,
and sometimes it is treated as nearly synonymous with irrelevant. The
sayings and doings of the third person are, as a rule, irrelevant, so that no
proof of them can be admitted. Every act done or spoken which is relevant
on any ground must be proved by someone who saw it with his own eyes
and heard it with his own ears”.
28. To consider the submission, this court has perused the Section 161
Cr.P.C. statement of LW.113. The statement suggests that LW.113 claimed
personal knowledge regarding the transactions between D-Cart and Midhun
Company in connection with the alleged liquor dealings. While part of his
statement refers to what he came to know about Midhun’s intent to return
funds through banking channels, as such, it cannot be wholly classified as the
statement of LW.113 as hearsay.
29. Learned senior counsel for the Respondent-State submits that between
2019 and 2024, Andhra Pradesh State Beverages Corporation Limited
(APSBCL) made payments totaling ₹1,569.52 Crore to SPY Agro Industries
5
(2011) 2 SCC 532
17
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Crl.P.No.2904 of 2025
Ltd., from which ₹60 Crore was circulated among SPY Distilleries, M/s.
Sanhoc Labs, and M/s. D-Cart Logistics. The prosecution claims that ₹5
Crores was transferred from M/s D-Cart Logistics (A.16) and its Director,
Tukekula Eeswar Kiran Kumar Reddy (A.9), to PLR Projects Pvt. Ltd. on
31.12.2019 and 13.02.2020, supported by material placed on record. The
petitioner, however, contends that the amount received in 2019 was repaid to
D-Cart Logistics on 30.10.2021. This court finds prima facie merit in the
prosecution’s argument that such repayment, nearly two years later, does not
exonerate the petitioner from alleged involvement.
30. The prosecution, on the other hand, has submitted material indicating
that the petitioner’s family members hold substantial interests in PLR Projects
Pvt. Ltd. and have previously served as directors. Further, the Petitioner’s
Election Affidavit dated 24.04.2024 discloses a liability of ₹47.74 Crores owed
to PLR Projects Pvt. Ltd. Additionally, records show that the petitioner holds
shares in Shiva Shakthi Dairy Pvt. Ltd., whose only directors are his mother
and sister. It is the prosecution’s case that Shiva Shakthi Dairy Pvt., Ltd., is
one of the subsidiary business companies of the PLR Group. Thus, the
prosecution argues that following the investigation after 03.04.2025, new
evidence has emerged showing a money trail from the accused company
(A.16) through suspicious transactions to PLR Projects Pvt. Ltd and the
investigation also revealed that significant sums paid to PLR Projects Pvt. Ltd.
and other companies were kickbacks. Relying on these details, the
prosecution asserts it has established a direct link between the petitioner and
PLR Projects Pvt. Ltd., showing that the proceeds of crime were transferred to
the petitioner’s family. In the absence of any contrary material, it cannot be
said that reliance on witness statements to link the transaction with the alleged
liquor scam is unjustified.
31. The prosecution further relies on the statements of LWs.104, 108, 113,
and 121 to show the involvement of petitioner in the commission of offence.
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Crl.P.No.2904 of 2025
The Hon’ble Apex Court in P.Krishna Mohan Reddy V. The State of Andhra
Pradesh6, observed in paragraphs 43 to 45, as under:
“43. A statement given by an accused to the police under Section 161 of
the Cr.P.C. may be either in the form of a confession or an admission. The
Privy Council in Pakala Narayana Swami v. Emperor reported in (1939)
P.C. 47 explained that a confession is a statement admitting the offence or
at any rate substantially all the facts which constitute the offence, whereas
an admission is only in respect of a gravely incriminating fact. Even a
conclusively incriminating fact is not of itself a confession. Where such a
statement is a confessional statement, the rigour of Sections 25 and 26
will apply in full force, and the said confession would be completely
inadmissible as held in Sahib Singh (supra) and a catena of other
decisions of this court. Where, however, such a statement amounts to an
admission, the statement being one under Section 161, would immediately
attract the bar under Section 162 of the Cr.PC., and the same may be used
only for the very limited purpose provided in the Proviso as held in Mahabir
Mandal (supra).
44. We are conscious of a handful of decisions of this court wherein it
has been held that statements under Section 161 of the Cr.P.C. ought to
be looked into by the courts in deciding the question of grant of bail.
Indresh Kumar v. State of Uttar Pradesh & Anr., reported in 2022 SCC
OnLine SC 2411, observed that “statements under Section 161 of Cr. P.C.
may not be admissible in evidence, but are relevant in considering the
prima facie case against an accused in an application for grant of bail in
case of grave offence”. Similarly, in Salim Khan v. Sanjai Singh reported
in (2002) 9 SCC 670, it was held that the court is “duty-bound to consider
all the statements recorded under Section 161 CrPC, examine the gravity
of the offence and also examine the question of possibility of the accused
tampering with the evidence and possibility of getting the attendance of the
accused during trial and then would be entitled to grant bail to an
accused”.
45. However, the aforesaid observations cannot be singled out and
construed devoid of their context. While it is permissible for the courts to
examine the statements recorded under Section 161 of the Cr.P.C. to
ascertain whether a prima facie case has been made out against the
accused and the nature or gravity of the allegations, the same applies only
insofar as such police statements are of witnesses and not accused
persons.
46. Both Indresh Kumar (supra) and Salim Khan (supra) have held
that in deciding the question of grant of bail, it is the statements of
6
MANU/SC/0737/2025
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TMR, J
Crl.P.No.2904 of 2025
witnesses under Section 161 of the Cr.P.C. that have to be looked into.
Nowhere has this court held that even the police statements of the
accused person under Section 161 of the Cr.P.C. must also be looked into
at the stage of grant of anticipatory or regular bail.”
32. In light of the observations made by the Hon’ble Apex Court, this court
has gone through the witness statements relied upon by the prosecution,
excluding the statements of the co-accused. Upon careful perusal, this Court,
prima facie, finds merit in the prosecution’s submission that the statements
provided by several witnesses have underscored the petitioner’s prima facie
involvement in the criminal conspiracy associated with the Excise Policy. The
prosecution contends that these changes were orchestrated with the intent to
secure substantial kickbacks.
33. Learned senior counsel for the petitioner submits that the petitioner is a
two-time elected Member of Parliament representing the Rajampeta
Constituency. His father, a sitting MLA and former Minister, is also a
prominent leader in the YSRCP. It is contended that both the petitioner and
his father hold significant political stature, and that the present case has been
foisted upon them due to political vendetta, as similar allegations were made
against the current Chief Minister and others during the previous regime. This
court views that mere political differences between the petitioner and the
current government do not justify granting anticipatory bail when the
prosecution places prima facie material to show the petitioner’s involvement in
the alleged offence.
34. Learned senior counsel for the petitioner further placed reliance on the
decision in P.Krishna Mohan Reddy (supra), wherein the Hon’ble Supreme
Court held that:
27. To some extent, the petitioners could be said to have made out a prima
facie case of political bias or mala fides, but that by itself is not sufficient to
grant anticipatory bail, overlooking the other prima facie materials on
record. Political vendetta or bias, if any, is one of the relevant
considerations while considering the plea of anticipatory bail. The courts
20
TMR, J
Crl.P.No.2904 of 2025should keep one thing in mind, more particularly, while considering the
plea of anticipatory bail, that when two groups of rival political parties are at
war, which may ultimately lead to litigations, more particularly, criminal
prosecutions, there is bound to be some element of political bias or
vendetta involved in the same. However, political vendetta by itself is not
sufficient for the grant of anticipatory bail. The courts should not just look
into the aspect of political vendetta and ignore the other materials on
record, constituting a prima facie case as alleged by the State. It is only
when the court is convinced more than prima facie that the allegations are
frivolous and baseless, that the court may bring into the element of political
vendetta into consideration for the purpose of considering the plea of
anticipatory bail. The frivolity in the entire case that the court may look into
should be attributed to political bias or vendetta.
35. In this regard, a reference can be made to the decision reported in
Ramveer Upadhyay and Ors. V. State of U.P. and Ors. 7 , wherein the
Hon’ble Supreme Court held that:
“30. The fact that the complaint may have been initiated by reason of
political vendetta is not in itself a ground for quashing the criminal
proceedings, as observed by Bhagwati, C.J. in Sheonandan Paswan v.
State of Bihar and Ors. MANU/SC/0206/1986. It is a well-established
proposition of law that a criminal prosecution, if otherwise justified and
based upon adequate evidence, does not become vitiated on account of
mala fides or political vendetta of the first informant or complainant.
Though the view of Bhagwati, C.J. in Sheonandan Paswan (supra) was
the minority view, there was no difference of opinion about this finding. To
quote Krishna Iyer, J., in State of Punjab v. Gurdial Singh
MANU/SC/0433/1979, “if the use of power is for the fulfilment of a
legitimate object, the actuation or catalysation by malice is not illegal.”
36. The learned senior counsel for the petitioner submits that in the
previous regime, Crime No.18 of 2023 was registered against the current
Chief Minister, the then Excise Minister, and an IAS officer. The allegations in
the present case mirror those in Crime No.18 of 2023. This court granted bail
to the then Chief Minister, noting his role as Leader of the Opposition, his lack
of control over the relevant department, absence of flight risk, and Z+ security
cover, which ensured that anticipatory bail would not hinder the investigation.
7
MANU/SC/0524/2022
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Crl.P.No.2904 of 2025
However, the bail order in the earlier case does not indicate any receipt of
amounts by the petitioner therein.
37. The learned senior counsel for the petitioner argues that, as a Member
of Parliament, the petitioner had no control over or involvement in the
formulation or execution of the State’s Excise Policy. Therefore, there is no
fiduciary or legal entrustment, nor any dishonest misappropriation of public
property attributable to him. He further submits that such entrustment or
misappropriation, as defined under Section 405 IPC, is essential for an
offence under Section 409 IPC. While the petitioner’s contention has merit, the
court is not in a position to reach a definitive conclusion at this stage, as the
investigation is ongoing. Additionally, the record shows that during the
investigation, Sections 7, 7A, 8, 13(1)(b), and 13(2) of the Prevention of
Corruption Act, 1988 were added on 22.04.2025 vide a memo before the
Special Judge for Trial of SPE and ACB cases-cum-III Additional District and
Sessions Judge, Vijayawada. In contrast, the prosecution in the present case
suspects that the amounts received by PLR Projects Pvt. Ltd. are linked to the
liquor scam, and no material is available to show that the said transaction is
unrelated to the allegations made by the prosecution. Therefore, the
observations made in the bail order related to Crime No. 18 of 2023 do not
apply to the present case.
38. The Hon’ble Apex Court in a decision reported in P. Chidambaram V.
Directorate of Enforcement8, wherein it is held that:
“83. Grant of anticipatory bail at the stage of investigation may frustrate
the investigating agency in interrogating the accused and in collecting the
useful information and also the materials which might have been
concealed. Success in such interrogation would elude if the accused
knows that he is protected by the Order of the Court. Grant of anticipatory
bail, particularly in economic offences would definitely hamper the effective
investigation. Having regard to the materials said to have been collected by
the respondent Enforcement Directorate and considering the stage of the8
(2019) 9 SCC 24
22
TMR, J
Crl.P.No.2904 of 2025investigation, we are of the view that it is not a fit case to grant anticipatory
bail.”
39. The Hon’ble Apex Court in a decision reported in State Rep. by the
CBI V. Anil Sharma9. Wherein it is observed that:
“6. We find force in the submission of the CBI that custodial interrogation
is qualitatively more elicitation-oriented than questioning a suspect who is
well ensconced with a favourable order under Section 438 of the Code. In
a case like this effective interrogation of a suspected person is of
tremendous advantage in disinterring many useful informations and also
materials which would have been concealed. Success in such interrogation
would elude if the suspected person knows that he is well protected and
insulated by a pre-arrest bail order during the time he is interrogated. Very
often interrogation in such a condition would reduce to a mere ritual. The
argument that the custodial interrogation is fraught with the danger of the
person being subjected to third-degree methods need not be
countenanced, for, such an argument can be advanced by all accused in
all criminal cases. The court has to presume that responsible police
officers would conduct themselves in a responsible manner and that those
entrusted with the task of disinterring offences would not conduct
themselves as offenders.”
40. In Ashok Kumar V. State of Union Territory Chandigarh 10 , the
Hon’ble Apex Court held that:
12. There is no gainsaying that custodial interrogation is one of the
effective modes of investigating the alleged crime. It is equally valid that
just because custodial interrogation is not required, that by itself may also
not be a ground to release an accused on anticipatory bail if the offences
are severe. However, a mere assertion on the part of the State while
opposing the plea for anticipatory bail that custodial interrogation is
required would not be sufficient. The State would have to show or indicate
more than prima facie why the custodial interrogation of the accused is
required for investigation.
41. This court views that the investigating officer deserves a free hand to
take the investigation to its logical conclusion in a case containing severe
allegations. Granting anticipatory bail to the petitioner could hinder the
ongoing investigation. The established legal principle is that anticipatory bail is
9
(1997) 7 SCC 187
10
2024 SCC Online SC 274
23
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Crl.P.No.2904 of 2025
not granted as a matter of routine; it should only be provided when the court is
convinced that exceptional circumstances warrant such an extraordinary
remedy. The necessity for custodial interrogation of the petitioner is
paramount in this case to facilitate a thorough investigation into the
accusations.
42. The Hon’ble Supreme Court, after referring to Satlingappa Mhetre’s
case and other judgments, observing that anticipatory bail can be granted
only in exceptional circumstances, in Jai Prakash Singh V. State of Bihar
and Another11, held as under:
19. Parameters for the grant of anticipatory bail in a serious offence are
required to be satisfied, and further, while granting such relief, the court
must record the reasons therefor. Anticipatory bail can be granted only in
exceptional circumstances where the court is prima facie of the view that
the applicant has falsely been implicated in the crime and would not
misuse his liberty. (See, D.K. Ganesh Babu v. P.T. Manokaran [(2007) 4
SCC 434], State of Maharashtra v. Mohd. Sajid Husain Mohd. S. Husain
[(2008) 1 SCC 213] and Union of India v. Padam Narain Aggarwal [(2008)
13 SCC 305])
43. In CBI V. Vijay Sai Reddy12, the Hon’ble Supreme Court held that:
34. While granting bail, the court has to keep in mind the nature of
accusations, the nature of evidence in support thereof, the severity of the
punishment which conviction will entail, the character of the accused,
circumstances which are peculiar to the accused, reasonable possibility of
securing the presence of the accused at the trial, reasonable apprehension
of the witnesses being tampered with, the larger interests of the
public/State and other similar considerations. It has also to be kept in mind
that for the purpose of granting bail, the legislature has used the words
“reasonable grounds for believing” instead of “the evidence” which means
the court dealing with the grant of bail can only satisfy itself as to whether
there is a genuine case against the accused and that the prosecution will
be able to produce prima facie evidence in support of the charge. It is not
expected, at this stage, to have the evidence establishing the guilt of the
accused beyond a reasonable doubt.
11
(2012) 4 SCC 379
12
(2013) 7 SCC 452
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TMR, J
Crl.P.No.2904 of 2025
44. It cannot lose sight of serious allegations levelled by the prosecution
and the evidence collected during the investigation and produced before this
court, which prima facie reveal the petitioner’s role in the offence in question.
Given these circumstances, custodial interrogation is deemed essential to
confront the petitioner with the gathered evidence and to unravel a broader
conspiracy implicating the accused in the implementation of the Excise Policy.
45. Having considered the submissions made on behalf of both sides and
after considering the gravity of the offence, circumstances of the case,
particularly taking note of the accusation that ₹3,500 crores were said to be
collected towards kickbacks for the liquor syndicate and also considering the
settled principle of law that power of grant of bail under Section 438 Cr.P.C., is
to be sparingly exercised in extraordinary circumstances and thus, no such
circumstances being having been made out in this case, this court does not
find it a proper case for granting the relief of anticipatory bail to the petitioner.
46. Taking into account the overall facts and circumstances, this court
concludes that the petitioner is not entitled to leniency in the grant of
anticipatory bail. Consequently, the petition, lacking merit, is dismissed.
47. Nothing stated above shall be construed as a final expression of opinion
on the merits of the case, and the observations made in the present case are
only for adjudicating the present bail application.
Miscellaneous applications, pending if any, shall stand closed.
_____________________________
JUSTICE T. MALLIKARJUNA RAO
Date: 15.07.2025
MS / SAK
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Crl.P.No.2904 of 2025
THE HON’BLE SRI JUSTICE T. MALLIKARJUNA RAO
CRIMINAL PETITION No.2904 OF 2025
Date: 15.07.2025
MS
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