Accepting the state government's stand that the place of occurrence of the crime was not within the territorial jurisdiction of the high court, Justice S S Sateeshchandran rejected the anticipatory bail petition.
Director General of Prosecutions (DGP) T Asaf Ali had opposed the bail plea stating that the offence had taken place outside the state and the petitioner was not a resident of Kerala.
The Madras High Court had earlier rejected Purushothaman's anticipatory bail application.
A 13-year old boy was killed and another critically injured in the incident.
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According to the petitioner, the Kerala High Court had the jurisdiction to pass orders on his bail plea as he hails from Pattathanam in Kollam district.
He submitted that his business rivals had allegedly influenced politicians to lodge the case against him.
Chennai police have been on the lookout for Shaji, on the run since the incident.