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A 20-member team had carried out a marathon raid at the quarters of activist poet's daughter in Hyderabad.
Rao was brought to Hyderabad and placed under house arrest following an SC order.
SC directed that the activists should be kept under house arrest until the next date of hearing on September 6.
The reaction, mostly by Left liberals, were apparently provoked by a tweet by film-maker Vivek Agnihotri.
Acting on a tip-off, security forces had launched the operation from Dantewada district in the forest along the border of the two districts.
Naxals attacked a patrolling team advancing through forest of Barkot village, leading to a gun battle between the two sides