Andhra liquor scam: Supreme Court flags SIT lapses in Raj Kesireddy arrest
Synopsis
The Supreme Court has declined to shield the SIT in the Andhra Pradesh liquor scam, refusing to stay a High Court order that threw out Raj Kesireddy's arrest on constitutional grounds. With a ₹1,048 crore money trail alleged and the ED's parallel probe ongoing, the case exposes how procedural shortcuts by investigators can unravel high-profile arrests — even in cases of this scale.
Key Takeaways
The Supreme Court on 31 August declined to stay the Andhra Pradesh High Court order quashing the arrest and remand of Raj Kesireddy in the liquor scam.
A Bench led by Chief Justice Surya Kant flagged contradictions in the SIT 's conduct, including seeking a production warrant when Kesireddy was already in custody.
The AP High Court quashed the arrest citing violation of Article 22(1) — grounds of arrest were not communicated in writing within the required timeframe.
The ED has traced an alleged money trail of ₹1,048.45 crore ; properties worth ₹441.63 crore have been attached under the PMLA .
The alleged scam caused a loss of around ₹4,000 crore to the Andhra Pradesh state exchequer, according to the complaint that triggered the FIR.
The Supreme Court has issued notice to the State of Andhra Pradesh ; the matter is adjourned pending counter affidavits.
The Supreme Court on Monday, 31 August declined to stay an Andhra Pradesh High Court order quashing the arrest and remand of Kesireddy Rajasekhara Reddy, alias Raj Kesireddy, in the alleged ₹349 crore liquor transportation scam, while expressing serious concern over the Special Investigation Team (SIT)'s handling of the probe. The court issued notice to the State of Andhra Pradesh and an Additional Superintendent of Police, who had challenged the High Court's ruling.
What the Supreme Court Observed
A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi, and Justice V. Mohana questioned the SIT's decision to seek a production warrant against Raj Kesireddy even when his anticipatory bail petition was pending and he was already in custody in a separate case. The Bench noted that since he was already in custody, the question of him absconding simply did not arise.
The court also pointed to an apparent contradiction in the SIT's conduct: the agency had sought custodial interrogation and secured a production warrant, yet reportedly declined to take Raj Kesireddy into police custody when he was actually produced before the court — opting instead for judicial custody. The matter was adjourned after respondents sought time to file their counter affidavit.
Why the High Court Quashed the Arrest
The Andhra Pradesh High Court had earlier held that Raj Kesireddy's arrest and consequential remand were legally unsustainable. A single-judge Bench of Justice Tuhin Kumar Gedela found that the manner in which grounds of arrest were communicated to him violated the constitutional safeguard under Article 22(1).
The High Court ruled that informing an arrested person of the grounds of arrest is not a procedural formality but a substantive protection of personal liberty. Citing Supreme Court precedents, it held that written grounds must be furnished at the earliest — and in no case later than two hours before production before a Magistrate for remand. The court quashed the arrest and remand but allowed the investigation to continue, directing Raj Kesireddy to cooperate whenever called.
The Scale of the Alleged Scam
The proceedings stem from an alleged liquor transportation scam in Andhra Pradesh during the tenure of the previous YSR Congress Party (YSRCP) government. The Enforcement Directorate (ED) is investigating the case on the basis of an FIR registered by the Andhra Pradesh CID, following a complaint alleging a loss of approximately ₹4,000 crore to the state exchequer.
The ED has claimed that its investigation traced a money trail of ₹1,048.45 crore in alleged kickbacks, with payments reportedly collected in cash, gold, and through other financial arrangements including hawala channels. In March, the agency attached movable and immovable properties worth ₹441.63 crore belonging to Raj Kesireddy, his family members, related entities, and other accused under the Prevention of Money Laundering Act (PMLA).
Who Is Raj Kesireddy
Raj Kesireddy is a former advisor to former Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy. He was arrested by the Andhra Pradesh CID's SIT in 2025. The Andhra Pradesh High Court granted him bail on 7 April 2026. The ED has also conducted searches at premises linked to him and other accused as part of its parallel money-laundering investigation.
What Happens Next
With the Supreme Court declining to stay the High Court order, Raj Kesireddy's quashed arrest stands for now. The apex court's notice to the state government signals that the procedural questions around the SIT's conduct will receive closer judicial scrutiny. How the SIT responds — and whether it can justify its handling of the production warrant — could shape the trajectory of the broader liquor scam prosecution.
Point of View
As this case shows. The Andhra Pradesh liquor scam involves an alleged money trail of over ₹1,000 crore; letting it unravel on Article 22 violations would be an institutional failure. The Supreme Court's notice is a warning shot, but the deeper question is whether the SIT has the investigative rigour to rebuild a case that survives constitutional scrutiny.
NationPress
31 Aug 2026
Frequently Asked Questions
What is the Andhra Pradesh liquor transportation scam?
It is an alleged scam involving the illegal transportation of liquor in Andhra Pradesh during the previous YSRCP government, with a complaint alleging a loss of approximately ₹4,000 crore to the state exchequer. The ED's investigation has traced an alleged money trail of ₹1,048.45 crore in kickbacks collected through cash, gold, and hawala channels.
Why did the Andhra Pradesh High Court quash Raj Kesireddy's arrest?
The High Court held that the SIT failed to communicate the grounds of arrest to Raj Kesireddy in writing and within the constitutionally required timeframe, violating Article 22(1). It ruled this was a substantive breach of personal liberty, not a mere procedural lapse, and consequently quashed the arrest and remand.
What did the Supreme Court say about the SIT's conduct?
The Supreme Court Bench led by Chief Justice Surya Kant questioned why the SIT sought a production warrant when Raj Kesireddy was already in custody in another case, making absconding impossible. It also flagged a contradiction: the SIT sought custodial interrogation but reportedly declined police custody when he was produced in court.
Who is Raj Kesireddy and what is his connection to the case?
Raj Kesireddy, full name Kesireddy Rajasekhara Reddy, is a former advisor to ex-Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy. He was arrested by the AP CID's SIT in 2025 in connection with the liquor scam and was granted bail by the Andhra Pradesh High Court on 7 April 2026.
What happens to the investigation now that the arrest has been quashed?
The investigation continues — the High Court explicitly allowed it to proceed while quashing only the arrest and remand. Raj Kesireddy has been directed to cooperate with investigators whenever called. The Supreme Court has issued notice to the state government, and the matter will be heard again after counter affidavits are filed.
