In a setback to former Chief Minister N. Chandrababu Naidu, the Andhra Pradesh High Court on Friday dismissed his petition to quash the FIR registered against him in a skill development case and to set aside his judicial remand.

The high court, which had reserved its orders on Wednesday, pronounced the same on Friday, hours after a Vijayawada ACB Court extended his judicial custody till September 24.

A single bench of Justice Sreenivas Reddy did not agree with the arguments of the counsels of the Telugu Desam Party (TDP) chief challenging his arrest and judicial remand in the case.

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Appearing on behalf of Harish Salve, the counsels had argued that the case against Naidu was politically motivated. The council had submitted to the court that the Crime Investigation Department (CID) did not take prior permission from the Governor before arresting Naidu as required under section 17A of the Prevention of Corruption Act.

Mukul Rohatgi, who had argued the case on behalf of CID, had contended that section 17A of the PC Act does not apply as the CID investigation started before the amendment of July 26, 2018.

Naidu was arrested in the case by the CID in Nandyal on September 9. The next day, the ACB Court in Vijayawada sent him to judicial custody for 14 days. The former chief minister was subsequently shifted to Rajahmundry Central Jail.

The Vijayawada Court had also rejected Naidu’s plea for house custody instead of judicial custody. The case relates to the establishment of clusters of Centers of Excellence (CoEs) in the state of Andhra Pradesh, with a total estimated project value of Rs 3,300 crore when Naidu was the chief minister.

The CID claimed that the alleged fraud had caused a huge loss of Rs 371 crore to the state government. The agency claimed that an advance of Rs 371 crore, representing the entire 10 percent commitment by the government for the project, was released before any expenditure by the private entities.

According to the CID, most of the money released by the government as advance was diverted to shell companies through fake invoices, with no actual delivery or sale of the items mentioned in the invoices, CID officials said.

The CID mentioned in its remand report that the total amount spent by private entities on six skill development clusters is sourced exclusively from funds advanced by the state government and the Andhra Pradesh Skill Development Centre, totaling Rs 371 crore.

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