The Kerala High Court issued a three-month interim stay on a notice issued by the Enforcement Directorate (ED) to the Kerala Infrastructure Investment Fund Board (KIIFB) on the use of funds raised through masala bonds for the board.
The VG Arun court issued a preliminary stay on further proceedings in the matter in the KIIFB suit challenging the notice issued against the board by the ED in connection with the use of funds generated through masala bonds for infrastructure development in the state. ED initiated proceedings under the Foreign Exchange Management Act.
The KIIFB approached the Supreme Court earlier this month to quash the notification. The board said that the ED often issued such notices during elections and claimed that there was no problem in spending funds to purchase land for infrastructure development and that everything was being done in accordance with Reserve Bank of India norms.
He further stated that the acquisition of land for infrastructure projects cannot be equated with real estate activity or the purchase of land for commercial use. Moreover, infra projects worth ₹ 90,000 crore approved by KIIFB were affected by the ED action.
The ED opposed the KIIFB’s plea saying it was not maintainable as it had only issued a notice seeking clarification on the matter. She argued that the board had to refer the matter to the appropriate forum under the Foreign Exchange Management Act.
Published – 16 Dec 2025 20:39 IST
