Supreme Court turns the liquor probe on the investigators

The Supreme Court on Monday, 31 August 2026, put the conduct of Andhra Pradesh’s Special Investigation Team under a sharper light than the High Court order the state had come to challenge. A bench led by Chief Justice of India Surya Kant, sitting with Justices Joymalya Bagchi and V. Mohana, heard the government’s and the SIT’s challenge in New Delhi and made clear that the court wanted to understand how the probe itself had been run before it revisited the High Court’s conclusions.

The dispute traces to the High Court’s decision to quash the arrest and consequential remand of Kasireddy Rajasekhar Reddy, also known as Raj Kesireddy, and former Andhra Pradesh State Beverages Corporation Limited managing director D. Vasudeva Reddy. The High Court had held that Article 22(1) safeguards on communicating the grounds of arrest had not been met, while also leaving room for the investigation to continue. The state and the SIT asked the Supreme Court to undo that result. The bench’s immediate tone, however, was not a simple stay-or-no-stay conversation.

After roughly two years of investigation, the court expressed strong displeasure at how the SIT had proceeded. Judges indicated they would first examine the investigating agency’s behaviour and only then turn to the High Court order on its merits. Questions from the bench went to the sequence of custody steps: why a production warrant was sought while anticipatory bail was pending; why the warrant path was pressed when Kesireddy was already in custody in another case; and whether the agency had been “really serious” about police custody after obtaining a warrant only to seek judicial custody instead. Those questions do not decide guilt or innocence. They do put the probe’s procedural seriousness on the record as the first issue the court intends to test.

Notices were issued to Raj Kesireddy and D. Vasudeva Reddy. The next hearing was adjourned. In the reporting that followed the Monday hearing, the Supreme Court was described as declining to stay the High Court order that had quashed the arrests. That leaves the High Court’s quashing intact for now, while the Supreme Court process continues on notice.

The case background, as reported in the same thread, is the alleged liquor-transportation scam linked to the previous YSRCP government. A CID FIR has cited about ₹349 crore in an alleged transport scam and an alleged loss to the exchequer of around ₹4,000 crore. Separately, the Enforcement Directorate’s financial probe has claimed a money trail of ₹1,048.45 crore in alleged kickbacks and, in March, attached movable and immovable properties worth ₹441.63 crore linked to Kesireddy, family members and related entities under the Prevention of Money Laundering Act. Those figures belong to the investigative claims already on the public record; they are not findings of the Monday Supreme Court hearing.

Kesireddy has been described as a former advisor to former chief minister Y.S. Jagan Mohan Reddy. The CID SIT arrested him in 2025. The Andhra Pradesh High Court granted him bail on 7 April 2026. Monday’s Supreme Court hearing therefore sits at the intersection of a long-running political-era corruption allegation, a High Court judgment that voided a specific arrest sequence, and a top-court bench that has chosen to interrogate the investigators before it reopens the High Court’s conclusions.

For readers, the practical takeaway is narrow and important. The Supreme Court has not, on this hearing, rewritten the High Court’s quashing order. It has opened a gate for examining how the SIT used warrants and custody options, issued notices to the two accused named in the challenge, and left the next date for a fuller hearing. In a case where the public numbers run into hundreds and thousands of crores, the court’s first demand was not a new theory of the scam. It was an account of the probe.