HC grants relief to Thomas Isaac from ED summons till Wednesday

Thomas Isaac
Thomas Isaac. File photo: Manorama

Kochi: The Kerala High Court on Thursday said that former Kerala Finance Minister Thomas Isaac need not appear before the Enforcement Directorate till next Wednesday.

Isaac had moved the Kerala High Court seeking quashing of the two summons issued to him by the ED.

The court has asked the agency to respect the privacy of the CPM leader. Justice VG Arun also asked the ED why the former FM had to furnish extensive personal details at this stage of the investigation. The ED had asked Thomas Isaac to furnish the details of his personal wealth and his family's wealth in the second summons.

ED clarified to the court that the leader was not summoned as an accused but as a witness for collection of evidence.

The court also remarked that a person who is summoned as part of a probe need not be an accused in the case. 'If there is reason for doubt, is the agency not allowed to initiate action under Section 37(1),' the court asked Isaac.

The High Court will consider Isaac's plea next on Wednesday, August 17.

Isaac, in the plea, contends that the ED was attempting to conduct a fishing and roving inquiry into the activities of Kerala Infrastructure Investment Fund Board (KIIFB) and such inquiries have been time and again deprecated by the apex court.

He also claimed that the summons issued to him to appear before the ED do not reveal the nature of the violation, if any, by him of the provisions of the Foreign Exchange Management Act (FEMA) or as to what is the investigation in relation to which his response is sought for.

Therefore, the "summons are ex-facie illegal and beyond the jurisdiction of the scope of inquiry contemplated under the FEMA since admittedly there is no violation of any provision of the said Act", Isaac claimed in his plea.

The plea also contains his reply dated August 9 to the latest ED summons for his presence before it on August 11.

While the reply contends that the summons issued to him should be withdrawn or recalled by the ED and it should refrain from initiating further proceedings against him in the matter. 

Then, Isaac had termed the ED notice to him as a 'political move' by the BJP government at the Centre, alleging it was misusing all investigation agencies for its political gains.

Isaac had said before the last Assembly election, that the ED, the CAG and even the Income Tax Department was after KIIFB.

Kerala High Court. Photo: E V Sreekumar.

Isaac refuses to appear after 2 summons

Isaac had refused to appear before the Enforcement Directorate on Thursday. The former Finance Minister of Kerala asked the agency to clarify the nature of his crime in an e-mail reply to the summons.

The summons were issued as part of its probe into alleged violations in the financial dealings of KIIFB when he was the state Finance Minister in the previous LDF government.

"I do not own the KIIFB documents. My entire wealth is an open book. The agency has not yet clarified the crime I have allegedly committed," he said.

The leader had also refused to answer the agency's summons on July 19 citing that he had a class at the EMS learning centre. The second notice seeking his appearance was sent by ED in the first week of August.

Logo of KIIFB

Meanwhile, Opposition leader V D Satheesan supported Isaac saying that ED has no authority to probe the masala bond issue. "The opposition's stand is that KIIFB is a mechanism outside the general budget. Ultimately, the government will have to include it in the budget. It will end up being the government's liability. The CAG reports for the past two years also support our argument. However, we oppose the ED probe against masala bonds. ED's brief is to probe money laundering. The notice issued by ED to Thomas Isaac has no relevance," Satheesan said.

5 MLAs file plea against ED action

Meanwhile, a group of CPM MLAs including KK Shailaja and actor Mukesh has also approached the High Court against the ED action. The legislators have argued that the ED action was detrimental to the development of the state.

The plea is listed for hearing before a bench of Chief Justice S Manikumar and Justice Shaji P Chaly.

CPI(M) MLAs K K Shailaja, I B Sathish and actor M Mukesh, CPI MLA E Chandrasekharan and Congress (Secular) MLA Kadannappalli Ramachandran have moved a joint plea in the high court against the ED probe.

Advocate V M Krishnakumar, who is representing the MLAs in the matter, confirmed filing of the case on Wednesday and that it was listed for hearing during the day.

In the plea, the MLAs have alleged that the ED was carrying out a fishing and roving exercise to discredit the Kerala Infrastructure Investment Fund Board (KIIFB) and as a result scare away its various investors.

They have contended that the only financial transaction under the Foreign Exchange Management Act (FEMA) which KIIFB carried out was the issuance of 'masala bonds' and the same was done with the permission of RBI which is the regulator.

If the RBI, as the regulator, has no complaints about any FEMA violation, how can an outside agency carry out an investigation regarding the same, is the question raised by them in their plea.

The MLAs, in their plea, have claimed that the actions of ED will adversely affect or bring to a halt over 900 development projects, worth around Rs 73,000 crore, in the state.

They have said that any differences between the Centre and the state should be resolved through a dispute resolution mechanism and not by using ED as KIIFB is a state-run entity.

(With PTI inputs.)

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