KOCHI: Kerala High Court on Wednesday dismissed as withdrawn a petition challenging the constitutional validity of the issue of Masala Bonds to overseas investors by the Kerala Infrastructure Investment Fund Board (KIIFB).
When the petition came up for hearing, the court pointed out that the investment was canvassed by the board and not the state government. Following this, the counsel for the petitioner sought permission to withdraw the petition. The petition was filed by M R Ranjith Karthikeyan, a chartered accountant from Thiruvananthapuram.
The petitioner had contended that the bonds violated Article 293(1) of the Constitution. He said that KIIFB had been constituted to raise and administer funds for infrastructure projects in the state. Masala Bonds were debt instrument denominated in Indian rupees but settled in foreign currency.
The state had raised `2,150 crores from the bonds. The petitioner pointed out that as per Article 293(1), the state was allowed to borrow money only within the territory of the country.