The Constitutional Court ruled Wednesday that the Bt2-trillion borrowing bill was unconstitutional.
The ruling rendered the bill invalid even though it has been passed by the Senate.
The court ruled that the bill violated the charter both in its content and in its enactment procedure, Chaowana Traimas, the secretary to the Constitutional Court said.
The court voted 9:0 to rule that the bill's content was unconstitutional and voted 6:2 to rule that the bill's enactment procedure was unlawful.
The Democrats had alleged that the bill violated Article 169 and Article 170 of the Constitution because the bill sought to bypass the normal budgetting process.
The Democrats also alleged that some coalition MPs voted for the bill on behalf of their peer.
Satit Wongnongtaey, a protest leader, informed the demonstrators at Lumpini Park at 1pm of the court’s ruling to loud cheers.
Satit told the crowd that Thai people would not have to be in debt for 50 years.
He said Wirat Kalayasiri, the head of the Democrat’s legal team, would seek an impeachment against caretaker Prime Minister Yingluck Shinawatra for having sponsored an unconstitutional bill.
With eyes brimming with tears, Yingluck said she hoped that the next government would continue with the project to develop the country’s transport infrastructure. She insisted that it would require a special law to obtain loans for the project.