This forced Deputy Speaker Nadendla Manohar to adjourn the House for the day without transacting any business after two earlier adjournments.
While the TRS members stood in the Well of the House holding placards, the Telangana Congress MLAs came to the front row in a group and raised slogans in favour of a separate state.
The TDP members, on the other hand, were on their feet at their respective seats raising the same demand.
Interestingly, two Congress MLAs loyal to rebel leader YS Jaganmohan Reddy too joined their Telangana colleagues but did not carry the printed placards that had Sonia Gandhi's picture. Instead they held a white paper with the slogan "Jai Telangana" only.
"I joined the issue only because I am an MLA from Secunderabad in Telangana. My loyalty is with late YSR and Jagan," actress and legislator Jayasudha Kapoor told newsmen coming out of the House.
The Deputy Speaker made repeated appeals to the members to let the House take up discussion on the Budget but to no avail.
Legislative Affairs Minister D Sridhar Babu too made a similar appeal. He also said the issue (Telangana) being raised by some members was important and could be taken up for elaborate discussion.