Congress legislator A Revanth Reddy was taken into preventive custody and released later.
The Hyderabad High Court pulled up Telangana Police after A Revanth Reddy, a senior Congress leader in the state, was detained early Tuesday morning for threatening to stop a public meeting of caretaker chief minister K Chandrashekar Rao, three days before the state votes in the assembly elections.
Asking if Telangana is a "banana republic", the court also summoned the state police chief.
Mr Reddy, a sitting legislator from Kodangal who is contesting in the December 7 elections, was picked up from his home in Vikarabad district, 75 km from Hyderabad, early on Tuesday morning. A police team barged into his home at around 3 am, when the family was sleeping, according to his wife.
Mr Reddy was taken into preventive custody and released in the evening after Mr Rao's rally got over.
"Police are acting in a biased manned. DGP also did not follow court orders on providing security to me. Hundreds of police personnel broke doors and barged in to my house and dragged me away while I was sleeping at 4 am. The incident reflects the state of affairs of the conditions under which people are living," Mr Reddy said after he was dropped at home.
The most senior police officer of Vikarabad was moved out of the district. The Election Commission has issued directions to not assign Superintendent of Police T Annapurna any work related to the state elections.
Condemning the police action, Congress president Rahul Gandhi said the Telangana Rashtra Samithi (TRS) government resorted to the police action "due to fear of defeat."
"TRS cannot stop the Congress wave with arrests. Revanth Reddy's arrest is pinnacle of KCRs dictatorship. Days are nearing to end TRS' anti-people governance. The arrest was due to fear of defeat. People are going to give rest to KCR (K Chandrashekar Rao) by defeating him," Mr Gandhi tweeted in Telugu on Tuesday.
After Mr Reddy was taken away, large gatherings were banned in Kodangal as a precaution, Rajat Kumar, the state election body chief told NDTV.
It was the second time Mr Reddy faced action in the run-up to the Telangana elections. Last week, he and his associates' homes were raided. The state election body chief said that Rs. 51 lakh was seized during the raids. Mr Reddy lashed out at his political opponents and alleged that he was facing "politically-motivated persecution."