Custodial Remand AP Liquor Scam Supreme Court Order: SC Stays Surrender of Ex-CM Aides

The Supreme Court of India recently delivered a critical order in the high-profile Andhra Pradesh liquor scam, effectively staying the immediate custodial remand of three key accused. The apex court’s intervention, which granted interim protection from surrender, followed the Andhra Pradesh High Court's decision to cancel the default bail previously granted to the trio.

A Bench of the Supreme Court, while hearing the special leave petitions (SLPs) filed by the accused, issued notice to the State government. Crucially, the Bench stayed the operation of the High Court’s surrender directive, ensuring the three individuals—all linked to the previous administration—remain out of custody pending the next hearing.

The primary focus of the Supreme Court’s query during the hearing was the necessity of immediate incarceration, especially given the advanced stage of the investigation and the prospect of a protracted trial involving hundreds of witnesses. This judicial scrutiny underscores a growing emphasis on balancing the demands of law enforcement with the fundamental right to personal liberty, particularly after the completion of the investigation phase.

The Context of the Allegations: The ₹3,500-Crore Scandal

The Andhra Pradesh liquor scam is a multi-crore corruption case, pegged by investigators at approximately ₹3,500 crores. The allegations centre on a deep political-business nexus that purportedly flourished between 2019 and 2024.

The prosecution has alleged a systematic manipulation of the state’s liquor procurement and distribution mechanism. The core accusations involve:

• Brand Manipulation: Suppression of established, popular liquor brands in the market.

• Preferential Orders: Granting undue favour and preferential orders to new, specific liquor labels.

• Kickbacks: Systematic receipt and routing of kickbacks through business entities and political channels as a result of the manipulated procurement process.

The three accused who secured interim relief from the Supreme Court occupy influential positions within the machinery of the former State government and a related business entity:

1. K. Dhanunjaya Reddy: A retired IAS officer who served as the former Secretary in the Chief Minister’s Office (CMO).

2. Pellakuru Krishna Mohan Reddy: The former Officer on Special Duty (OSD) to the then Chief Minister.

3. Balaji Govindappa: A director of Bharati Cements, a related business group.

Their alleged roles were central to facilitating the scheme, connecting political decision-making with business execution, making their continued liberty a contentious point for the prosecuting agencies.

The Legal Flashpoint: Default Bail and its Cancellation

The immediate legal controversy revolved around the status of the accused's bail.

The three individuals were initially granted default bail by the trial court. Default bail, a crucial safeguard under Section 167(2) of the Code of Criminal Procedure (CrPC), is automatically granted to an accused if the investigating agency (in this case, the Crime Investigation Department or CID) fails to file a chargesheet within the stipulated period (typically 60 or 90 days, depending on the nature of the offence). This right accrues regardless of the merits of the case, purely on the technical failure of the investigating agency to complete its work on time.

The State challenged this default bail order before the Andhra Pradesh High Court. The High Court, upon examining the technicalities, set aside the trial court's order, effectively cancelling the default bail. Consequentially, the High Court directed the accused to surrender before the trial court by a specific date and then apply for regular bail (bail granted on the merits of the case).

This High Court order created the urgent need for the accused to approach the Supreme Court via special leave petitions, seeking a stay on the requirement to surrender, which would have meant immediate return to custody.

SC's Scrutiny of Custodial Necessity

During the hearing before the Supreme Court, the Bench—comprising the Chief Justice of India, Justice Surya Kant, and Justice Joymalya Bagchi—engaged in a pointed line of questioning directed at the senior counsel representing the State. The court exhibited a clear skepticism regarding the necessity of custodial remand at this stage of the complex trial.

The Court noted the sheer scale of the trial, observing that the list of witnesses was extensive. The Bench pointed out that there were initially around 400 witnesses, a number that might eventually be rationalised to 200, or even 100.

Addressing the State's counsel, the Chief Justice of India posed a practical and jurisprudential challenge, asking directly: “You must tell us what purpose would be served by keeping them in custody.”

The Court underscored that liberty should be the default position, especially when the investigation is complete, and the primary concerns of the prosecution can often be addressed through stringent conditions imposed on the accused. The Bench observed that if the only apprehension cited was the potential for the accused to influence witnesses—a concern often raised against former high-ranking officials—the Court possessed the power to impose strict conditions to mitigate that risk.

The Court also highlighted the potential futility of ordering surrender merely to force an application for regular bail. The Chief Justice remarked that many applications for default bail are rendered infructuous if a court, upon considering a regular bail application, concludes that liberty can be granted “without impacting fair trial.” This observation suggests the Court’s focus was on the ultimate balance of rights and the utility of the State’s demand for detention.

Judicial Temperament: Prioritising Liberty over Academic Discussion

The Supreme Court’s approach in this matter was marked by a preference for pragmatic judicial intervention over theoretical arguments. The Bench was keen on understanding the concrete gain for the prosecution from the immediate re-incarceration of the accused.

The court explicitly stated its intention to focus on the practical realities of the case: “We don't want academic discussions that waste the court's time.” This statement served as a strong signal to the State that any argument for custodial remand must be grounded in immediate, demonstrable necessity that could not be satisfied by judicial oversight and conditions.

The arguments advanced by the senior counsel for the accused—namely, that they had already spent time in jail, the investigation was complete, and the chargesheet had been filed—appeared to resonate with the Bench's emphasis on proportionality. The completion of the investigation significantly reduces the need for "custodial interrogation," one of the main justifications for pre-trial detention.

By granting interim protection, the court has effectively maintained the status quo, deferring the requirement for the accused to surrender. The final decision on the legality of the High Court's cancellation of the default bail will be taken after the State files its detailed response, which the Supreme Court directed to be done within ten days.

Conclusion: Status Quo Maintained and the Larger Message

The Supreme Court's order in the Andhra Pradesh liquor scam case is significant not merely for the three individuals who received relief, but for the broader principle it reiterates in Criminal Law (Anti-Corruption) jurisprudence. By questioning the State’s demand for custody in a case where the chargesheet has been filed, and the trial promises to be lengthy due to the voluminous witness list, the apex court has underscored the principle that bail, not jail, is the rule.

The ruling ensures that the accused are exempted from surrendering immediately, subject to the conditions already imposed by the trial court. This protection maintains their liberty status until the Supreme Court can thoroughly review the merits of the High Court's order.

The larger judicial message is clear: in high-profile corruption cases, where political dynamics often intersect with legal procedures, the superior judiciary will exercise caution and meticulous scrutiny before allowing the curtailment of personal liberty. The State must demonstrate a compelling, practical, and immediate purpose for custodial remand—one that goes beyond mere allegations and technical grounds—especially when the wheels of justice, as indicated by hundreds of witnesses, are set for a long and drawn-out trial.