The Supreme Court of India has once again stepped into one of the most high-profile legal battles on the national stage — the ₹3,500 crore Andhra Pradesh liquor scam — by extending interim protection o three accused persons, while refusing to set aside a High Court order cancelling their default bail. This significant judicial intervention highlights enduring questions about the balance between procedural rights, custodial orders, and the right of the prosecution to pursue vigorous investigations in alleged economic offence cases.
On January 21, 2026, the Supreme Court granted interim protection from surrender to three individuals — K. Dhanunjaya Reddy, Pellakuru Krishna Mohan Reddy, and Balaji Govindappa — who are named in the alleged Andhra Pradesh liquor policy scam. The apex court bench, led by Chief Justice Surya Kant along with Justices Joymalya Bagchi and Vipul M. Pancholi, continued the temporary reprieve even as it declined to disturb the Andhra Pradesh High Court’s earlier order that cancelled their default bail.
The High Court had dismissed the default bail granted to the trio, directing them to surrender to the trial court and “apply for regular bail.” In response, the accused filed petitions before the Supreme Court challenging that directive, leading to the interim protection order. The top court, however, made it clear that it was not interfering with the High Court’s evaluation of default bail and asked the accused to move the trial court for regular bail in accordance with law.
The interim protection allows the trio to avoid immediate surrender while the legal challenge continues. This is critical because, in complex economic offences involving voluminous evidence and intricate financial trails, prolonged investigative processes often result in extended custody unless interim relief is granted.
The prosecution’s case, led by senior advocates representing the state government, contends that the alleged liquor scam involved political-business manipulation of liquor procurement and sales between 2019 and 2024. According to the chargesheet, distilleries were favoured over established brands, kickbacks were systematically collected, and irregular procurement practices caused substantial monetary loss to the state exchequer.
In court, the state was represented by Senior Advocate Siddharth Luthra, who argued against the conversion of default bail into regular bail without due consideration of the gravity and complexity of the allegations. While there is no finding of wrongdoing against Luthra personally in relation to this matter, the ongoing public and legal discourse sometimes references the sidharth luthra case in the context of his courtroom advocacy — illustrating how senior counsel involvement in politically sensitive and legally complex cases often attracts broader scrutiny and debate about legal strategy and courtroom conduct.
The Andhra Pradesh liquor scam allegations stem from claims of misconduct tied to the formulation and execution of the state’s liquor procurement and excise policies under the previous government. Investigators, including the Special Investigation Team (SIT), have alleged that the policy was used to grant undue advantage to certain companies while sidelining mainstream brands, enabling the funneling of illegal kickbacks and illicit proceeds.
Further investigative developments in the case have highlighted the wider network of financial misconduct. For example, the SIT uncovered a money-laundering trail involving approximately ₹78 crore through shell firms and bullion transactions that allegedly linked the proceeds back to core accused figures in the scam. This arrest, of Mumbai-based financier Anil Chokhara, underscores how deeply intertwined the case is with financial irregularities beyond state borders.
Recent actions in related proceedings continue to evolve. On January 29, 2026, the Andhra Pradesh High Court granted bail to other accused in the liquor scam while rejecting applications by some, indicating that as evidence solidifies, courts are navigating varying outcomes based on individual involvement and risk assessments.
From a legal perspective, the Supreme Court’s decision to extend interim protection — despite upholding the High Court’s cancellation of default bail — reflects a nuanced approach that respects both prosecutorial interests and the constitutional rights of the accused. Economic crimes with far-reaching political and administrative implications often require careful judicial scrutiny to ensure that neither investigative momentum nor personal liberties are undermined unjustly.
The Supreme Court’s interim order effectively buys time for the accused to pursue regular bail while the litigation over their legal entitlements proceeds. In doing so, the bench has emphasised that custody cannot be imposed lightly where the investigation is ongoing and the right to fair trial must be safeguarded.
For observers and legal practitioners, this case represents a benchmark in how courts manage the tension between ongoing criminal investigations and the rights of accused persons — especially in charges involving alleged misuse of public office and large-scale financial irregularities. The involvement of senior counsel such as Siddharth Luthra in prosecutorial roles further underscores how high-profile litigation intersects with evolving standards of advocacy in complex economic offence jurisprudence.
As the proceedings move forward, the trial court’s consideration of regular bail applications, and any future deliberations by the Supreme Court, will be closely watched. These developments not only shape the immediate legal fate of the accused but also contribute to broader debates on the role of interim relief, default bail interpretation, and prosecutorial strategy in India’s criminal justice system.
In essence, the Supreme Court’s recent order reflects an ongoing effort to balance the rights of the accused with the imperative of thorough investigation in one of India’s most significant alleged financial scams — a balance that remains at the heart of contemporary legal discourse.
