Justice Devan Ramachandran, a single-judge justice, suggested that former State Finance Minister Dr. Thomas Isaac and officials of the Kerala Infrastructure Investment Fund Board (KIIFB) comply with the Enforcement Directorate’s (ED) summons in the Masala Bonds case, with the court overseeing the process to ensure no arrest or intimidation occurs.
During the hearing of a petition filed by Isaac and KIIFB against the ED summons, Justice Ramachandran proposed cooperation with the summons, emphasizing that it was merely an opinion. He assured that there would be no humiliation, intimidation, or arrest involved, emphasizing that responding to a summons is permissible for anyone. Justice Ramachandran clarified that the ED investigation was preliminary in nature.
Senior Advocate Arvind Datar, representing KIIFB, and Advocate Jaideep Gupta, representing Thomas Isaac, informed the court that they would await instructions from their clients regarding this recommendation.
Justice Ramachandran further explained that the ED indicated it was not a criminal investigation but an initial inquiry, and proposed holding the matter in limbo while observing the developments. The judge stated that the court would scrutinize the matter entirely before postponing the hearing until February 19.
The ED has issued summonses to Isaac and KIIFB officials twice in relation to the Masala Bonds case, which involves allegations of contravention of the Foreign Exchange Management Act (FEMA) through the issuance of rupee-denominated bonds outside India.
KIIFB, a governmental organization responsible for funding public infrastructure projects in Kerala, reportedly raised around 2,150 crores through Masala Bonds in 2019. The ED initiated an investigation suspecting violations of FEMA regulations.
Isaac and KIIFB officials initially challenged the ED summons in 2022. In December 2023, the ED informed the High Court of its decision to withdraw the summons but retained the authority to continue the investigation.
Following the issuance of new summonses to Isaac by the ED last month, Isaac and KIIFB filed additional petitions contesting the action.
