Kerala High Court stays order allowing ED to issue fresh summons to Thomas Isaac, KIIFB officials

The Kerala High Court on Thursday stayed a November 24 interim order of a single-judge which had allowed the Enforcement Directorate (ED) to issue fresh summons to former State Finance Minister Dr. Thomas Isaac and officials of the Kerala Infrastructure Investment Fund Board (KIIFB) in connection with its probe into the financial transactions of KIFFB [Kerala Infrastructure Investment Fund Board v Director, Directorate of Enforcement] [Dr. TM Thomas Isaac v The Deputy Director]..A division bench of Justices A Muhamed Mustaque and Shoba Annamma Eapen passed the order."These writ appeals came from two different writ petitions pending before this court. A learned single judge passed a common order on 10/10/2022 after hearing both sides. The order interdicted respondents from issuing summons pursuant to investigation initiated under FEMA read with provisions of the Income Tax Act. On 24/11/2023 the matter came up before justice Devan Ramachandran of this court. The learned judge ordered that the writ petition would not stand in the way of the respondents issuing fresh summons. We note that the earlier order by justice VG Arun was a detailed one. Therefore, without hearing the matter, another judge cannot issue an order virtually modifying the order of the other single judge... We are not on the merit of the controversy involved in the matter.... In light of the law we set aside the interim order dated 24/11/2023," the division bench ordered..The order was passed on two appeals, one moved by the KIIFB and the other by Dr. Isaac, challenging the interim order passed by single-judge Justice Devan Ramachandran on November 24. In 2022, both KIIFB and Isaac had moved petitions challenging the summons by the ED in a probe into the KIIFB's financial transactions.The plea moved by the KIIFB challenged the repeated issuance of summons by the ED to KIIFB officers, including CEO KM Abraham, in connection with alleged violations of the Foreign Exchange Management Act (FEMA) when it issued 'Masala Bonds', i.e, 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..On October 10, 2022, single-judge Justice VG Arun had ordered that no further summons be issued to Isaac and KIIFB for two months. This interim order was extended periodically while the petition remained pending. However, on November 24 this year, Justice Devan Ramachandran passed an interim order allowing the ED to issue fresh summons and continue with its investigation, subject to further orders..It is this November 24 order that both KIIFB and Isaac have challenged before the division bench. "However on 24.11.2023, learned single Judge, in effect vacated the said order by permitting the respondents 1 & 2 to issue fresh summons to the appellant and other persons and to continue investigation. By virtue of the impugned order, the above writ petition was practically become infructuous in all respects," Isaac's appeal stated. .Advocate General of Kerala and Senior Advocate K Gopalakrishna Kurup appeared for KIIFB.Additional Solicitory General of India and Senior Advocate ARL Sundaresan, and advocate Jaishankar V Nair appeared for the ED..[Read live coverage of the hearing]