The notice, served on Friday night, asked the channel to reply within three days as to why appropriate legal action should not be initiated against it, contending the audio tape it aired was "defamatory".
"Since the programme telecast on June 7 at around 8.30 pm contained material disturbing the public tranquillity, affecting the maintenance of law and order as it in violation of Section 5 and Rule 6 of cable TV news network Act, as the programme is defamatory deliberate, false with suggestive innuendos and half-truths," the notice read.
The audio tape pertained to a purported talk between Naidu and the nominated MLA relating to alleged attempts by TDP to woo his support for the party nominee in Telengana Legislative Council polls.
Telangana TDP MLA Revanth Reddy and two others were arrested and remanded for allegedly trying to bribe the nominated MLA.
The airing of the audio tape has led to a slugfest between the TDP and TRS, the ruling parties in Anhdra Pradesh and Telangana respectively.
Reacting to the notice slapped on the channel, its CEO Narayan Reddy said police had no right to issue notices without verifying authenticity of the footage scientifically.
"We are going to lodge a complaint with the president, prime minister, governor and Press Council of India. Issuing the notice itself is wrong. AP Police has not right to issue such notice. They cannot curtail the freedom of press," Reddy told PTI.
Coming out strongly against the notice issued to the channel, Telangana Union of Working Journalists said it was "undemocratic, unconstitutional and disrespectful approach of AP CM".
Journalists held a demonstration before the DGP's office and scores of them were taken into preventive custody by police. The protesters raised slogans against Chief Minister N Chandrababu Naidu and AP Police.