The party also mandated its legislators not to accept gifts offered by ministers.
"We feel that it is a wrong practice. Some say this is not the first time that a minister has given a gift to MLAs and there had been precedents. But it is a wrong precedent," CPI state secretary Pannian Raveendran told a press meet here.
Last week, opposition leader V S Achutanandan had returned the gift holding it would not be morally right to spend public money on largesses like this when the state was reeling under a grim drought with people facing severe drinking water crunch in many parts of the state.
Mohan, who belongs to the Socialist Janata (Democratic), had sought to playdown the controversy saying there was nothing new about giving gifts to legislators.
The Minister's largesse had drawn adverse coverage in local media with a section criticising the wisdom of spending a few lakhs of rupees from the public exchequer at a time government has to make additional provisions for tackling an unusually serious drought gripping the state.