Isaac moves HC against ED summons

Former Finance Minister T.M. Thomas Isaac will not appear before the Enforcement Directorate (ED) on Thursday. Besides writing to the agency explaining his reasons for not appearing before it, Dr. Isaac filed a writ petition in the High Court seeking to quash the notices issued against him by the agency.

In an e-mail sent to the ED in response to its second notice asking him to be present at its office on Thursday in connection with the financial transactions of the Kerala Infrastructure Investment Fund Board (KIIFB) during the term of the first Pinarayi Vijayan-led government, Dr. Isaac explained why quizzing him was not required for the agency to ascertain the facts it wanted to find out about the KIIFB.

He wrote to them that the details pertaining to his assets were available in his election affidavits and in the income tax returns filed by him annually. He mentioned the same in the petition as well.

In his petition, he said that the ED had issued him two summons under Sections 37 (1) of the Foreign Exchange Management Act (FEMA), Section 131 (1) of the Income Tax Act and Section 30 of the Code of Civil Procedure asking to appear and explain his role in the KIIFB in respect of issuing masala bonds.

He pointed out that the summons did not reveal what was the nature of the violation of FEMA or details of the provision. The ED did not disclose what was the investigation, in relation to which his response was sought.

The summons, therefore, did not conform to the law laid down by the Supreme Court in this regard. In fact, there was no violation of any provision of FEMA, much less any violation of any law in the activities of the KIIFB. The summons were illegal and beyond the jurisdiction of the scope of inquiry contemplated under the FEMA.

He accused the ED of conducting a ‘roving and fishing inquiry’ in order to gather some material to see if there was any wrongdoing on his part. He said the agency had other means to collect the material sought on KIIFB, a body corporate under relevant statute enacted by the State legislature.

Five MLAs file plea

Left Democratic Front (LDF) legislators K.K. Shailaja, E. Chandrasekharan, Ramachandran Kadannappally, M. Mukesh, and I.B. Satheeesh on Wednesday jointly filed a public interest litigation before the Kerala High Court seeking a directive to the ED not to interfere with the functioning of the KIIFB under the guise of investigation into the funds raised by the board.

Repeated summons

They said in the petition that the repeated summons and inquiry conducted by the ED into the masala bond transactions of the KIIFB was “resulting in tarnishing the goodwill of the KIIFB and will result in the domestic financial institutions developing apprehension” about giving finance to the board. The ED’s actions had an “adverse economic impact” on the State.

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Printable version | Sep 20, 2022 5:15:53 pm | https://www.thehindu.com/news/cities/Kochi/isaac-moves-hc-against-ed-summons/article65755308.ece