Masala Bonds case: ED tells Kerala High Court it will withdraw summons issued to Thomas Isaac, KIIFB officials

The Enforcement Directorate (ED) on Thursday told the Kerala High Court that it will be withdrawing the summons issued to former State Finance Minister Dr. Thomas Isaac and officials of the Kerala Infrastructure Investment Fund Board (KIIFB) in connection with the central agency's probe into the board's financial transactions..The submission was made before the bench of Justice Devan Ramachandran during the hearing of petitions filed by Isaac and KIIFB officials against the ED summons issued to them in the Masala Bonds case.Taking on record the submission, Justice Ramachandran allowed the plea filed by Issac. The Court also partly allowed the plea filed by the KIIFB officials with regard to the summons. However, the Court clarified that it had not entered into the merits of the ED probe including whether it was maintainable. The issues were left open by the Court..In 2022, both KIIFB and Isaac had moved petitions challenging the summons by the ED in relation to its probe into the alleged violations of the Foreign Exchange Management Act (FEMA) in the issuance of 'Masala Bonds', or 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.Similarly, the KIIFB challenged the repeated issuance of summons by the ED to KIIFB officers, including its CEO, KM Abraham.In response, the Reserve Bank of India (RBI) informed the High Court that it had issued a Non-Objection Certificate (NOC) to KIIFB under the FEMA for raising funds by issuing masala bonds abroad..On October 10, 2022, the High Court passed an interim order directing that no further summons should be issued by the ED to Isaac and KIIFB officials for two months.However, on November 24 this year, Justice Ramachandran passed an order allowing the ED to issue a fresh summons and continue with its investigation, subject to further orders..This order was challenged by Issac and KIIFB officials before the division bench, which stayed the order allowing ED to issue fresh summons on December 7. On December 14 (Thursday), the single judge was informed about the withdrawal of the summons. .KIIFB 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.