Liquor scam: SC Raps SIT Over Kesireddy Arrest

The Supreme Court on Monday declined to stay an Andhra Pradesh High Court order quashing the arrest and consequential remand of Kesireddy Rajasekhara Reddy, alias Raj Kesireddy, in connection with the multi-crore liquor scam, while expressing serious concern over the manner in which the Special Investigation Team (SIT) conducted the probe.

A Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana questioned the SIT's decision to seek a production warrant against Raj Kesireddy when his anticipatory bail petition was pending, and he was already in custody in another case.

The CJI Kant-led Bench observed that since Raj Kesireddy was already in custody, there was no question of him absconding and questioned the need for seeking a production warrant in such circumstances.

The apex court also questioned the apparent contradiction in the SIT's stand, remarking that while the investigating agency had sought custodial interrogation and obtained a production warrant, it was reportedly not prepared to take Kesireddy into police custody when he was produced before the court and instead sought his judicial custody.

The CJI Kant-led Bench issued notice on the petition filed by the State of Andhra Pradesh and the Additional Superintendent of Police challenging the High Court's order and adjourned the matter after the respondents sought time to file their counter.

The Andhra Pradesh High Court had earlier held Raj Kesireddy's arrest and consequential remand to be legally unsustainable, finding that the manner in which the grounds of arrest were communicated violated the constitutional safeguard under Article 22(1).

The High Court held that informing an arrested person of the grounds of arrest was not a mere procedural formality but a substantive safeguard of personal liberty. It observed that the grounds had to be communicated in writing and within a timeframe that enabled the accused to consult counsel, oppose remand and seek bail.

The High Court further relied on the Supreme Court's rulings to hold that written grounds of arrest should be furnished at the earliest and, even in exceptional circumstances, no later than two hours before production before the Magistrate for remand. It consequently quashed the arrest and remand while allowing the investigation to continue.

A single-judge Bench of Justice Tuhin Kumar Gedela directed Kesireddy to cooperate with the investigation whenever called and comply with the conditions imposed by the court.

The proceedings relate to the alleged Rs 349 crore liquor transportation scam in Andhra Pradesh during the previous YSR Congress Party government. The ED has been investigating the case on the basis of an FIR registered by the Andhra Pradesh CID following a complaint alleging a loss of around Rs 4,000 crore to the state exchequer.

The ED has claimed that hundreds of crores changed hands through kickbacks, hawala and money-laundering channels.

According to the financial probe agency, its investigation traced a money trail of Rs 1,048.45 crore in alleged kickbacks, with payments allegedly collected in cash and gold and through other financial arrangements.

In March, the ED had attached movable and immovable properties worth Rs 441.63 crore belonging to Raj Kesireddy, his family members and related entities, besides properties linked to other accused and entities under the Prevention of Money Laundering Act.

Raj Kesireddy, a former advisor to former Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy, was arrested by the Andhra Pradesh CID's SIT in 2025.

The Andhra Pradesh High Court had granted him bail on April 7, 2026. The ED had also conducted searches at premises linked to Raj Kesireddy and other accused as part of its probe into the alleged liquor transportation scam.