Stalin also sought a CBI probe into Panneerselvam's allegations that he was forced to resign to make way for Sasikala.
The Tamil Nadu Opposition Leader also asked Sasikala to respond to Panneerselvam's various allegations rather than pointing fingers at his party and accused her of trying to find a way out of the problems in her party.
"DMK is not responsible for the political bickerings and internal squabbles of AIADMK. Don't point fingers at DMK, if you can't respond to Panneeselvam's charges," he said.
On Sasikala's remarks that he and Panneerselvam were looking at each other and laughing together in the Assembly, Stalin described it as a part of his party's "political decency".
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He said he used to exchange pleasantries even with the former Chief Minister, the late Jayalalithaa, and asked if that also amounted to similar allegations.
In a dramatic development, Sasikala had earlier alleged that main opposition DMK was behind Panneerselvam's revolt against her.
"DMK is behind Panneerselvam...The reason is that in the recent Assembly session the Chief Minister and Leader of Opposition were looking at each other and laughing together," she had said.
He recalled that when Jayalalithaa was hospitalised, he had visited the hospital to enquire about her health and later paid his last respects after she died. He had also consoled Panneerselvam, who was there, when the body was lying in state.
"Panneerselvam has listed the insults faced by him last night. If she can, let Sasikala respond to those," he said.
Stalin further alleged that the state's administrative machinery has "collapsed" and sought a CBI inquiry on Panneerselvam's allegations that he was coerced to resign.
"The Governor (Ch Vidyasagar Rao) should immediately come to Chennai and take due steps to protect Tamil Nadu's welfare," he said.