A Special CBI Court on Friday dismissed the bail pleas of former Karnataka minister Gali Janardhana Reddy and his brother-in-law BV Srinivas Reddy, arrested in connection with alleged illegal mining activities.
Judge B Naga Maruthi Sarma also dismissed the agency's petition which sought custody of both the accused for nine more days.
Janardhana and Srinivas are in judicial remand till October 3 and lodged at the Chanchalguda Central Prison here.
The CBI, probing ''illegal'' mining and irregularities in allotment of leases to Obulapuram Mining Company (OMC), had arrested Janardhana and Srinivas, who is managing director of the company, on September 5 from Bellary in Karnataka.
Earlier, seeking further custody of the Reddys, the prosecution submitted that during the six-day custodial interrogation of the accused (from September 13), both of them did not cooperate with the CBI, which posed several questions related to the illegal mining activities.
The agency also contended that it wanted to probe details of foreign 'benami' companies where Janardhana (a director of OMC) made and received investments by exporting iron ore and where the Reddys kept the proceeds from the illegal mining.
The CBI argued that the Reddys had exclusive knowledge of facts of the case and only they can provide information about who they conspired with in carrying out the illegal mining and whom they ''bribed'' to get permits for transfer of the illegally excavated iron ore.
Opposing the CBI plea, the defence counsels argued the Criminal Procedure Code (CrPC) did not permit police custody beyond the first 15 days of the arrest of an accused.
Following dismissal of its petition, the CBI may move the Andhra Pradesh high court. However, a decision in this regard would be taken only after holding consultations with senior CBI officials, a public prosecutor said.
The court dismissed the bail applications of Janardhana and Srinivas for the second time this month. Their earlier pleas were rejected on September 13.
The prosecution had yesterday opposed granting bail to the duo, saying "They are highly influential persons and may threaten witnesses and tamper with evidence."
CBI deputy legal adviser B Ravindranath also submitted that several witnesses were coming forward and submitting details before the agency against Janardhana and Srinivas, and if released on bail no one will come forward.
Arguing for bail, the defence counsels submitted that the Reddys were willing to surrender their passports if the prosecution apprehended that they will flee the country if released on bail.
The judge, after hearing arguments, had posted the matter for Friday.
Asked if the AP high court would be moved for bail, defence counsel V Rami Reddy said, "We have to see the order copy and then we will decide."