Kerala High Court Sets Aside Single Bench's Order Allowing ED To Issue Fresh Summons To Former Finance Minister Thomas Issac

Taking note that the Order issued by the Single Judge Bench of Justice Arun had been a detailed one, the Division Bench comprising Justice A. Muhamed Mustaque and Justice Shoba Annamma Eapen observed today that, 

"..propriety demands that without hearing the matter, a Single Judge cannot pass an Order virtually modifying the earlier Order passed by another Single Judge". 

Dr. Issac had claimed in his plea that the agency was seeking to conduct a 'fishing and roving' enquiry against him without revealing what the exact nature of violations are, to which the High Court had earlier asked why ED was asking Issac to produce documents relating to the assets at the first instance itself and added that he had the right to privacy.

KIIFB on its part, alleged that the the investigation into its affairs was intended as a "smear campaign perpetuated by vested political interests, to discredit the State Government machinery". It averred in its plea that the Masala Bonds had been issued with the necessary permission of the Reserve Bank of India for raising funds for undertaking development activities in Kerala, and added that the ED did not have jurisdiction to investigate into the issue of Masala Bonds. According to KIIFB, it was only the RBI which could inquire into any FEMA violations with respect to the issuance of rupee denominated bonds.