YSR Congress chief Y S Jaganmohan Reddy is set to walk out of jail after nearly 16 months with a special CBI court today granting him bail in a DA case, a development that could lend fresh political muscle to the ongoing movement for a united Andhra Pradesh.

Special CBI court judge U Durgaprasada Rao granted bail to the 40-year-old leader on a personal bond of Rs two lakh and two sureties of the like amount.

The conditional bail, however, restrains Jaganmohan from leaving Hyderabad without the court's permission. While granting bail, the court also directed the YSR Congress leader not to directly or indirectly induce or influence witnesses and be present before the court during the proceedings.

The CBI can approach the court for cancellation of the bail in case of violation of any of these conditions.

The case relates to investments made by various companies in Jaganmohan's firms in return for alleged undue favours extended to them, including land and water allotments, during the tenure of his father Y S Rajasekhara Reddy as Chief Minister between 2004 and 2009.

Jaganmohan's release, at a time when protests are raging across the state over its proposed bifurcation, comes as a huge relief for the party, which is the only political entity openly favouring a unified Andhra Pradesh.

His freedom could galvanise his party, particularly in the coastal Andhra and Rayalaseema regions, witnessing most of the protests over the proposed creation of Telangana. Despite the movement having popular support, the protests have so far been devoid of a mass leader and Jaganmohan could fill the slot, analysts feel.

The court premises erupted in celebrations as soon as the order was read out with YSR Congress leaders and supporters bursting firecrackers and exchanging sweets.


Jaganmohan's repeated bail applications had been rejected by in the past with CBI contending that he could influence the witnesses and thus the trial.

In his bail plea, Jaganmohan had sought his release in view of the ongoing agitation in coastal Andhra and Rayalaseema regions over the bifurcation of Andhra Pradesh as there was a need for him to be with the people and lead the stir as a leader of a political party.

In the 10 charge sheets filed by it so far, CBI named as accused several industrialists including BCCI chief and India Cements Vice Chairman and Managing Director N Srinivasan, Vice President of Dalmia Cements Punit Dalmia, Aurobindo Pharma Vice Chairman Nityananda Reddy, Ramky Infra Chairman A Dasaradharami Reddy and Nimmagadda Prasad.

The investigating agency also named former ministers M Venkata Ramana Rao, Sabitha Indra Reddy and D Prasada Rao, besides a current minister J Geetha Reddy in the various charge sheets.

Nimmagadda, an industrialist, who had been arrested, is still in Chanchalguda prison and Venkata Ramana Rao is currently out on interim bail on health grounds.

Jaganmohan had moved the court for bail on September 11 on the ground that the four-month deadline set by the Supreme Court for completion of investigation by the CBI had ended on September 9.

The Supreme Court had on October 5, 2012 and on May 9 this year rejected the bail petitions of Jaganmohan, who has been lodged in the Chanchalguda Central Prison here since his arrest on May 27, 2012.

In May this year, the apex court had directed CBI to complete its investigation and file the charge sheet(s) within four months.

Thereafter, the appellant could move the trial court, which would be "free to consider the prayer for bail independently on its merits without being influenced by dismissal of the present appeal," the Supreme Court had said.

CBI Counsel Surender said the agency will examine the court order and take a decision in a day or two on whether to challenge it in the High Court.

Ashok Reddy, Jagan's counsel, said his client is expected to be released from prison tomorrow after completing formalities.