[KIIFB v. ED] Kerala High Court grants relief to Thomas Isaac, KIFFB officials; orders no further summons for 2 months

The Kerala High Court on Monday ordered that no further summons be issued by the Enforcement Directorate (ED) to former State Finance Minister Dr. Thomas Isaac and two officials of the Kerala Infrastructure Investment Fund Board, for two months [Kerala Infrastructure Investment Fund Board v Director, Directorate of Enforcement] [Dr. TM Thomas Isaac v The Deputy Director]..The order was passed by Justice VG Arun on two pleas - one moved by the KIIFB and the other by former Kerala Finance Minister, Dr. Thomas Isaac, challenging the summons issued by the ED in a probe into the KIIFB's financial transactions."Although the enquiry by the ED is not liable to be interdicted, there is no justification for petitioners to be repeatedly summoned by the officers of the ED," the Court said..The plea moved by the KIIFB challenged the repeated issuance of summons by the ED to KIIFB officers, including CEO KM Abraham, in connection with alleged violations of the Foreign Exchange Management Act (FEMA) when it issued 'Masala Bonds', i.e, rupee denominated bonds issued outside India by Indian entities.The petition moved by Isaac, challenged the summons issued by the ED seeking his personal documents as well as those of his family members in connection with the same probe..Pointing out that the ED hasn't mentioned what contravention of FEMA it is probing in the summonses, the petitioners contended that the probe is nothing but a fishing expedition.Further they argued that the request for personal documents of the officers and their family members at this preliminary stage of investigation, is a violation of their right to privacy. The KIIFB, in particular, argued that the probe is adversely affecting its ability to raise funds which are necessary for infrastructure projects in the State. .In its counter, however, the ED argued that the investigation is at a preliminary stage and that the issuance of summons is perfectly legitimate as per the FEMA Act.It was also stated that the probe was initiated on the basis of complaints regarding FEMA violations in the issuance of masala bonds by the KIIFB..KIIB was represented by Advocate General K Gopalakrishna Kurup, Senior Advocate Arvind Datar and advocates BG Harindranath, M Gopikrishnan and Amith Krishnan H.Isaac was represented by Senior Advocate Siddhartha Dave and advocates Nandagopal S Kurup, N Raghuraj, Sayuja and Vivek Menon.Additional Solicitor General of India SV Raju, Deputy Solicitor General of India S Manu, and Central Government Counsel Jaishankar V Nair appeared for the ED..[Read Order]