Gravity Of Economic Offence Alone Cannot Be Sole Ground To Deny Bail: Andhra Pradesh High Court Grants Bail In ₹3,500 Crore Liquor Scam Case

“Bail Is The Rule And Jail Is The Exception Even In Economic Offences” – In a significant ruling concerning bail jurisprudence in economic offences, the Andhra Pradesh High Court held that seriousness of allegations alone cannot justify prolonged pre-trial incarceration once investigation is substantially complete.

Dr. Justice Venkata Jyothirmai Pratapa granting regular bail to Accused Nos. 8, 35 and 36 in the alleged ₹3,500 crore Andhra Pradesh Liquor Scam. The Court held that continued custody after filing of the charge sheet and in the absence of material indicating risk of abscondence or interference with the trial would violate the fundamental right to personal liberty under Article 21 of the Constitution.

The Court emphasized that even in grave economic offences, denial of bail cannot become an absolute rule, and the entitlement to bail must be assessed on the facts of each case.

The criminal case originated from allegations of large-scale irregularities in the implementation of the Andhra Pradesh excise policy and the functioning of the Andhra Pradesh State Beverages Corporation Limited (APSBCL) during the period 2019–2024.

The controversy came to light after a representation dated 26 August 2024 was submitted to the Principal Secretary to the Government of Andhra Pradesh alleging serious irregularities in the liquor supply system. The complaint alleged that the Orders for Supply (OFS) system was manipulated to favour certain liquor brands while suppressing established brands, and that the shift from an automated to manual OFS system enabled manipulation and corrupt practices.

Following preliminary enquiry, the matter was referred to the CID Police Station, Mangalagiri, which registered Crime No.21 of 2024 on 23 September 2024 under Sections 409, 420 and 120-B of the Indian Penal Code. Later, the Government constituted a Special Investigation Team (SIT) on 05 February 2025 to probe the alleged irregularities.

The investigation alleged a ₹3,500 crore liquor scam involving kickbacks, manipulation of liquor supply orders, and illegal diversion of funds, with several individuals accused of operating a large-scale network of financial irregularities.

The present petitions were filed by Accused Nos. 8, 35 and 36 seeking regular bail under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

The prosecution alleged that Accused No.8 acted as an “Operations Commander” in the liquor syndicate, allegedly managing kickback collections, coercing distilleries into paying illegal commissions, arranging SIM cards through fraudulent KYC documents, and coordinating the movement of illicit funds including laundering operations abroad.

It was further alleged that he played a crucial role in organising the collection and distribution of illegal money and assisting co-accused in diverting funds through international channels.

With respect to Accused Nos.35 and 36, the prosecution alleged that they acted as personal assistants to a former MLA (Accused No.38) and were responsible for organising the logistics of transporting large amounts of cash generated through kickbacks, allegedly to influence the 2024 Andhra Pradesh General Elections.

The prosecution claimed that cash consignments of ₹8–9 crores were transported from Hyderabad to Tirupati on several occasions, forming part of a larger conspiracy to distribute money for electoral influence.

Legal Issues Before the Court and Court’s Observations

The principal question before the High Court was whether the petitioners were entitled to regular bail in view of the gravity of the allegations and the stage of investigation.

The Court first revisited the settled principles governing bail, referring to several landmark decisions of the Supreme Court including P. Chidambaram v. Directorate of Enforcement, Kalyan Chandra Sarkar v. Rajesh Ranjan, State of U.P. v. Amarmani Tripathi, and Manish Sisodia v. Directorate of Enforcement.

Quoting from the Supreme Court’s decision in P. Chidambaram, the Court reiterated:

“The grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing a fair trial.”

The Court also acknowledged that economic offences constitute a class apart due to their potential impact on the financial health of the nation and the moral fabric of society. However, the Court clarified that this consideration cannot automatically justify denial of bail in every case.

Justice Pratapa observed:

“Even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case… ultimately the consideration will have to be on case-to-case basis on the facts involved therein.”

The Court emphasized that gravity of the offence alone cannot be the sole ground to deny bail, particularly where investigation has substantially concluded and the accused have already undergone significant pre-trial detention.

Consideration of Parity and Prolonged Pre-Trial Custody

The Court also examined the principle of parity, noting that Accused No.38, with whom the petitioners were allegedly associated, had already been granted bail.

While clarifying that parity is not an absolute right, the Court stated that parity depends on the role of the accused in the crime rather than mere involvement in the same offence.

The Court observed that no material distinction was shown by the prosecution to justify continued detention of the petitioners while similarly placed co-accused had already been granted bail.

Another important factor considered by the Court was prolonged pre-trial detention. The Court noted that the charge sheet had already been filed and investigation against the petitioners was substantially complete.

Relying on Manish Sisodia v. Directorate of Enforcement and Union of India v. K.A. Najeeb, the Court held that continued incarceration without commencement of trial may violate Article 21 of the Constitution.

The Court noted that trials involving voluminous documentary evidence and multiple accused are likely to take considerable time, and prolonged detention in such circumstances would be unjustified.

Taking into account the period of custody, completion of investigation, absence of recovery of proceeds of crime from the petitioners, and lack of evidence indicating risk of witness tampering or abscondence, the High Court concluded that continued detention was not warranted.

The Court therefore allowed the criminal petitions and directed that Accused Nos.8, 35 and 36 be released on bail, subject to strict safeguards.

The conditions imposed by the Court included execution of personal bonds of ₹1,00,000 each with two sureties, surrender of passports, and restriction on leaving India without court permission. The petitioners were also directed not to contact prosecution witnesses or co-accused, not to tamper with evidence, and to disclose all movable and immovable assets within two weeks.

Additionally, the petitioners were directed not to publish any information about the case in media, not to alienate properties connected to the investigation, and to report before the investigating agency every Saturday.

The Court clarified that the observations made in the order were only for the purpose of deciding the bail applications and would not influence the merits of the trial.

The Andhra Pradesh High Court’s ruling reiterates the constitutional balance between the seriousness of economic offences and the protection of personal liberty. By granting bail in the high-profile ₹3,500 crore liquor scam case, the Court reaffirmed that prolonged pre-trial detention cannot substitute punishment and must not override the guarantee of liberty under Article 21.

The judgment serves as an important reminder that bail jurisprudence must remain guided by fairness, proportionality, and the presumption of innocence, even in cases involving large-scale financial crimes.

Date of Decision: 06 March 2026