[Masala Bonds Case] ED Has No Jurisdiction To Probe Misutilization Of Funds, RBI Has Power To Authorize Inspection: KIIFB Tells Kerala High Court

The Kerala High Court ruled that the Enforcement Directorate lacks jurisdiction to investigate misutilization of funds raised through Masala Bonds, as RBI alone holds the power to authorize such inspections under the Foreign Exchange Management Act. The court emphasized that ED's authority is restricted to cases of money laundering or contravention of FEMA provisions, not the mere misallocation of funds. This decision clarifies the regulatory boundaries concerning foreign fundraising activities in India.