A single bench of Justice VG Arun passed the interim order, staying all proceedings of the show-cause notices the Enforcement Directorate had issued to Chief Minister Pinarayi Vijayan and two others for a period of three months.
Kerela HC
The Kerala High Court on Thursday stayed for three months the show-cause notices issued by the Enforcement Directorate (ED) to Chief Minister Pinarayi Vijayan, former State Finance Minister Dr. Thomas Isaac, and Chief Executive Officer (CEO) of the Kerala Infrastructure Investment Fund Board (KIIFB), KM Abraham, under the Foreign Exchange Management Act (FEMA), 1999.
A single bench of Justice VG Arun passed the interim order, staying all proceedings of the show-cause notices the Enforcement Directorate had issued to Chief Minister Pinarayi Vijayan and two others for a period of three months.
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The order came on a separate petition moved by Chief Minister Vijayan, former State Finance Minister Thomas Isaac, and KIIFB CEO KM Abraham, seeking to quash the show-cause notices of the Enforcement Directorate issued to them in November. The notices were issued in connection with the use of the Masala Bond funds by the Kerala Infrastructure Investment Fund Board (KIIFB) for acquiring land for infrastructure projects.
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Earlier on Tuesday, the High Court had granted an interim stay of the notice for three months in a plea preferred by the KIIFB. When the matter came up for consideration, the court felt that the petitioners in this case were also entitled to similar interim relief. It observed that there shall be an interim stay on further proceedings of the show-cause notices for three months. The court admitted the plea and directed the respondents to file counters in the case.
The ED had issued a notice proposing adjudication proceedings under FEMA against CM Vijayan, Thomas Issac, and KM Abraham in their capacities as KIIFB Chairman, former Vice Chairman, and current CEO, respectively.
In their plea, the petitioners contended that the ED’s conduct in its investigation into the issue has been rife with malafides. They claimed that the central agency had taken to issuing summons to KIIFB officials and show-cause notices ahead of the elections in the Left-ruled state. The petitioners also pointed out that the High Court had previously stayed the summons issued by the ED to the KIIFB officials and Dr. Isaac in connection with the probe.
The petitioners also submitted that adjudication proceedings against it would severely hamper its ability to raise funds for welfare projects in the state, as it discourages investors from lending funds.
Meanwhile, the ED moved a division bench of the Kerala High Court, challenging the single-bench order that stayed further proceedings against the Kerala Infrastructure Investment Fund Board over the utilisation of funds raised through Masala Bonds.
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