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 2 TMR, J Crl.P.No.2904 of 2025 Counsel 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:3
TMR, J 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 4 TMR, J Crl.P.No.2904 of 2025 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.5
TMR, J Crl.P.No.2904 of 2025
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 6 TMR, J Crl.P.No.2904 of 2025 investigation. 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.7
TMR, J Crl.P.No.2904 of 2025
(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.
8TMR, J Crl.P.No.2904 of 2025
(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 9 TMR, J Crl.P.No.2904 of 2025 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 10 TMR, J Crl.P.No.2904 of 2025 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 11 TMR, J Crl.P.No.2904 of 2025
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).
42025 SCC Online SC 764 12 TMR, J Crl.P.No.2904 of 2025
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.
13TMR, J Crl.P.No.2904 of 2025
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."15
TMR, J Crl.P.No.2904 of 2025
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.
16TMR, J Crl.P.No.2904 of 2025 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 TMR, J 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.
18TMR, J 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 19 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 2025 should 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.
7MANU/SC/0524/2022 21 TMR, J 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 the 8 (2019) 9 SCC 24 22 TMR, J Crl.P.No.2904 of 2025 investigation, 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 TMR, J 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 24 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 25 TMR, J 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