The court made the Reserve Bank a voluntary party in the case. After hearing the RBI’s explanation, the court will issue a final verdict in the case
Kochi: Former Finance Minister Dr. The High Court has stayed the Enforcement Directorate’s (ED) summons against Thomas Isaac and Kerala Infrastructure Investment Fund Board (KIFB) officials for two months. The court made the Reserve Bank of India (RBI) a voluntary party in the case.
Justice VG Arun’s order considered the petitions filed by Thomas Isaac and Kifbi demanding that the enforcement be troubled by sending summers continuously and to quash the summons.
Justice VG Arun observed that although the investigation by the Enforcement Directorate cannot be stopped, there is no justification for issuing summons to the petitioners. The court sought clarification from the RBI in the case. After hearing the RBI’s explanation, the court will issue a final verdict in the case. The case will be heard again on November 15.
The ED has initiated an investigation against Thomas Isaac and Kifbi for alleged violations of the Foreign Exchange Act (FEMA) in the issuance of masala bonds in 2019. The ED has alleged that there has been a violation of foreign exchange rules in the purchase of masala bonds and the money has been diverted.
However, the interim order of the court took into account the argument of the petitioners that the masala bond was purchased with the permission of the Reserve Bank and there was no violation of the law.
ED had sent two summons to Thomas Isaac asking him to appear. The second summons asked for details including the back account information of the relatives. Following this, he approached the High Court. Senior advocate Siddharth Dave appeared for Thomas Isaac.
However, appearing for the ED, Additional Solicitor General of SV Raju argued that the issuance of summons to record evidence in the ongoing investigation is a proper procedure under Section 37 of FEMA.
But the lawyer appearing for Kifbi argued that the protracted ED investigation is harming infrastructure projects in the state and the agency is unable to find material reasons to initiate the investigation. Senior Advocate Arvind Datar, Advocate General K Gopalakrishna Kurup and others appeared for KIFB.