The court observed that though the investigation/investigation being carried out by the ED cannot be interfered with, there is no justification for issuing summons by the ED officials repeatedly.
The court observed that though the investigation/investigation being carried out by the ED cannot be interfered with, there is no justification for issuing summons by the ED officials repeatedly.
Kerala The High Court on Monday directed the Enforcement Directorate (ED) to stay further action Summons issued to former Finance Minister Dr TM Thomas Isaac and Dr KM AbrahamKerala Infrastructure Investment Fund Board (KIIFB) Chief Executive Officer, KIIFB as part of the ED’s probe into the issuance of masala bonds.
Justice VG Arun passed the order on petitions challenging the summons issued to him by the former finance minister and CEO of KIIB.
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no justification for summons
The court observed that though the investigation/investigation conducted by the ED cannot be interfered with, there is no justification for issuing summons repeatedly by the ED officials.
In his plea, Dr. Isaac said that the ED had issued him two summons under Section 37(1) of the Foreign Exchange Management Act (FEMA), Section 131(1) of the Income Tax Act and Section 30 of the Code. Civil Procedure for appearing and explaining his role in issue of Masala Bonds by KIIFB.
The summons did not specify the nature of the FEMA violation or the details of the provision. The ED did not disclose what the investigation was, in respect of which his reply was sought. The ED was conducting ‘curved inquiries’. Therefore, the summons was not in conformity with the law laid down by the Supreme Court in this regard. In fact, there was no violation of any provision of FEMA, at all there was no violation of any law in the activities of KIIFB. The summons was illegal and was outside the scope of investigation under FEMA.
Masala Bonds of Central Government Institutions
Meanwhile, Dr. Abraham argued that the ED had not disclosed any material reason or suspicion for initiating the present investigation nor disclosed any alleged violation of FEMA by the petitioners. He said that no investigation has been initiated by the Central Government entities like National Highways Authority of India (NHAI) and National Thermal Power Corporation (NTPC) on the issue of Masala Bonds. Investigations on projects approved by KIFFB in the State have brought to the fore extremely harmful results. Hence the action of ED was illegal.