Introduction:

The Kerala High Court encountered two pleas challenging summons issued by the Enforcement Directorate (ED) to the Kerala Infrastructure Investment Fund Board (KIIFB) and former Finance Minister Dr. Thomas Issac in the masala bonds case. Despite earlier directives to respond to the summons, the Court refrained from passing formal orders, postponing the decision to the following day. Senior advocates representing Dr. Issac and KIIFB argued against the summons, citing procedural flaws and lack of individual responsibility in the bond issuance. The Court scheduled further hearings for submission of counter-affidavits, leaving the matter unresolved.

Arguments:

The Kerala High Court faced a standoff involving the Kerala Infrastructure Investment Fund Board (KIIFB) and former Finance Minister Dr. Thomas Issac challenging summons issued by the Enforcement Directorate (ED) in the masala bonds case. Senior Advocate Jaideep Gupta argued that Dr. Issac had a minimal role, being one member among many, and sought a deferral of summons. Senior Advocate Arvind Datar, representing KIIFB, contended that the summons lacked specificity. The court directed responses from KIIFB and ED, with the matter scheduled for further consideration.

Court’s Judgment:

Justice Devan Ramachandran refrained from passing formal orders but directed KIIFB and Dr. Issac to respond to the ED’s summons. The court posted the matter for further submissions and considered the counter-affidavits filed by both KIIFB and the ED. The hearing will resume the next day. The case revolves around alleged violations of FEMA provisions related to the issuance of rupee-denominated bonds abroad (masala bonds) by KIIFB and Dr. Issac.