[Masala Bonds Case] 'Cooperate With Summons Issued By ED Only For Once': Kerala High Court Tells KIIFB, Fmr Finance Minister Dr Thomas Isaac

Justice Devan Ramachandran orally stated that the investigation of the ED is only in its preliminary stage and suggested the parties abide by the summons only once which will be under the complete monitoring of the Court.

“I can make one suggestion, I am making this suggestion based on the Apex Court judgments…I can give you a limited suggestion. If you want you can co-operate with the summons once which I will be watching. There will be no arrest, no intimidation, there will be no interrogation. It will be only for the purpose for their (ED) purpose of getting facts. And only once, just once. And, then I will take it forward.”, stated the Court orally.

The Court made this suggestion in two separate pleas filed by KIIFB and Dr Isaac challenging the summons issued by ED in connection with the masala bonds case. The Court had not stayed the summons issued by ED against KIIFB and Dr Isaac.

Senior Advocate Arvind Datar appearing on behalf of the KIIFB submitted that they already produced all the copies of documents as sought in the summons. The Court had earlier enquired with the KIIFB regarding the submission of certified copies of documents. It was stated that the summons does not mention the term certified copies.

Senior Advocate Jaideep Gupta appeared on behalf of Dr Isaac and Additional Solicitor General of India (ASGI) A.R.L.Sundaresan, instructed by Standing Counsel Jaishankar V.Nair appeared on behalf of the ED.

Taking the suggestion put forth by the Court, the Counsels have sought time till Monday to take instructions regarding complying with the summons for once.

Regarding summons, the Court orally stated there would be no presumption of guilt or innocence and suggested that any citizen getting a summons is expected to answer it. It stated that since this is a preliminary inquiry, the parties could cooperate with the  summons for once.

The matter has been posted to Monday for hearing.

Background

KIIFB and former minister Dr Thomas Isaac had filed separate petitions before the High Court challenging the issuance of the summons by the ED alleging violations of provisions under the Foreign Exchange Management Act (FEMA) for raising funds by issuing rupee-denominated bonds (masala bonds) abroad. In October 2022, Justice V.G. Arun stayed further issuance of summons against KIIFB and Dr Isaac for two months.

Then, Justice Ramachandran permitted the issuance of fresh summons to Dr Isaac and KIIFB, subject to further orders of the Court. This was later set aside by a Division Bench citing technical grounds, that that such a modification of an earlier Interim Order could not have been issued.

In December last year, the ED withdrew the summons issued to the KIIFB and Dr Isaac. On the above submission, Justice Ramachandran left open all the other issues since there were no pending proceedings.

Case title: Kerala Infrastructure Investment Fund Board V Director, Thomas Issac v Deputy Director

Case number: WPC 1377/2024 & WPC 3719/2024