The police have not revealed the identity of the other arrested but sources have not ruled out involvement of some rich and famous in the racket. Kundan Bagh is a high-security area having houses of ministers, bureaucrats and other VIPs.
The Commissioner's Task Force raided the apartment in the early hours of Monday on specific information.
This is not the first time that a Telugu film actress has been arrested for prostitution. In 2009, Seema was arrested during a raid in Hyderabad's Tarnaka area.
The latest sex racket has come as yet another shocker for the Telugu film industry and comes close on the heels of the arrest of the two brothers of actor Ravi Teja while buying drugs from a Nigerian national.
Police Commissioner AK Khan has gone on record that they were keeping a watch on 60 personalities, including Telugu film actresses, suspected to be consuming drugs.