The Kerala High Court on Thursday reserved its verdict on a public interest litigation (PIL) moved by five members of the Kerala Legislative Assembly against the ongoing Enforcement Directorate (ED) probe into the financial transactions of the Kerala Infrastructure Investment Fund Board (KIIFB) [KK Shailaja & Ors. v Union of India & Ors.]..The PIL moved by Communist Party of India (Marxist) MLAs KK Shailaja, IB Satheesh and M Mukesh, Communist Party of India MLA E Chandrasekharan and Congress (Secular) MLA Ramachandran Kadannappally was heard today before a division bench of Chief Justice S Manikumar and Justice Shaji P Chaly.At the hearing, Senior Advocate Ranjith Thampan, appearing for the petitioner-MLAs, argued that the ED had been issuing repeated summons to several officials of the KIIFB in an effort to tarnish its goodwill which would in turn, affect the development of infrastructure in the State..On the other hand, Central Government Counsel, Jaishankar V Nair, appearing for the ED, argued that it is the petitioners who are trying to protect the officers of the KIIFB, under the guise of a PIL. As an example, he referred to the plea moved by Dr.Thomas Issac, former Kerala Finance Minister, against the ED summons issued to him which was heard by a single-judge of the Court earlier today. .The bench orally expressed that it concurred with the argument that the instant plea may not qualify as a PIL. Pertinently, it remarked that it may be better if those who have been summoned appear before the ED and co-operate with its investigation..The bench also said it would pass orders without admitting the matter. .The plea stated that the KIIFB has approved a total number of 993 projects throughout the State of Kerala and the total value of the approved projects was ₹53,869.44 crores. It also raised a sum of ₹2,150 crores from ‘Masala bonds’ with the sanction of the Reserve Bank of India under the Foreign Exchange Maintenance Act (FEMA).Masala bonds are bonds issued outside India but denominated in Indian rupees rather than local currency. Masasla bonds were first issued by World Bank backed International Finance Corporations. Unlike dollar bonds where the borrower takes the risk, in Masala bonds the investor take the risk regarding the valuation of the Indian Rupee..The plea included the following quote from the decision of the Supreme Court in Reliance Industry v Securities and Exchange Board of India.“Initiation of criminal action in commercial transaction should take place with lot of circumspection and the courts ought to act as the gate keepers of the same” Initiating frivolous criminal action against large corporations would give rise to adverse economic consequences for the country in the long run. Therefore the regulator should be conscious in initiating such an action and carefully weigh each factor.”It alleged that the ED has been constantly attempting to tarnish the goodwill of the KIIFB as well other statutory and executive establishments of the State of Kerala. Pertinently, the plea took serious objection to the repeated summoning of many office bearers of the KIIFB including its CEO, KM Abraham, as well as the wide publicity given to the same. " An impression is sought to be created that something is wrong in the functioning of the KIIFB. As stated earlier, the financial resources of the KIIFB apart from that is provided under Sec. 7 of the Act is by borrowing from leading financial institutions in the country. The impression of constant investigation under the FEMA Act and tarnishing the image of the KIIFB as a functional body corporate would result in the financial institutions doubting the credentials of KIIFB and they will be reluctant to further give financial assistants by way of loan as well as purchase of bonds etc.; issued by the KIIFB this will result in derailment of the entire financial prospects of the KIIFB which is in turn would result in serious prejudice for the development of infrastructure in the State of Kerala," the plea stated.The plea also sought orders to set up a mechanism to solve disputes between the Central and State Governments and their respective statutory agencies.