Mining Baron Gali Janardhan Reddy and his brother-in-law BV Srinivasa Reddy's bail petitions are adjourned for hearing on 12 September. The CBI has sought for a 15 days police custody of the accused for further interrogation. After hearing the day-long arguments from both CBI and Janardhana Reddy's counsel, the magistrate B Naga Maruthi Sharma adjourned the hearing for next Monday.

As soon as the hearing commenced, CBI's counsel member B Ravindranath stated they arrested Janardhana Reddy and B V Srinivas Reddy on two main grounds - that both were indulging in illegal activities in the Obulapuram Mining Company and that they encroached additional places than actually allocated by the government. The CBI's counsel argued the accused had encroached land more than the allotted 68.5 hectares at the Anantha Gangamma Konda in Obulapuram. He also said they were involved in manipulating the iron ore stock which was excavated somewhere else and exported to various countries showing the authorisation of OMC.

The CBI's counsel also argued that Janardhana Reddy also failed in providing certain details of his designation in the company. While Reddy initiated the process as applicant to obtain lease of the land and the authorisation letters were signed by B V Srinivasa Reddy as executive director, in the Income Tax returns, Janardhana Reddy mentioned his designation as director.
Gali Janardhana Reddy and his wife Lakshmi Aruna had also mentioned in the IT returns that both are directors of the company and they draw annual salaries of `18 crore while Srinivasa Reddy who is holding the position of executive director received salary of about `2 crore per annum. “How it is possible and why will an executive director draw lower salary than directors?” the CBI counsel questioned.

Meanwhile, opposing the CBI counsel’s argument, Janardhana Reddy’s counsels Uday Lalith, C V Nagesh and Uma Maheswara Rao stated their clients were never involved in illegal activities. They argued their clients did not encroach an inch of more land than what the government had allotted. In view of a case of boundaries relating to the OMC, Uday Lalith said the case is still pending in the Supreme Court and sought bail for Janardhana Reddy and Srinivasa Reddy. After hearing both arguments, Magistrate B Naga Maruthi Sharma adjourned the hearing to September 12.