The court said some features presented in the case were "too disturbing", that in fact "gives enough room to generate" suspicion that the machinery of vigilance is misused and abused to silence political opponents."
Justice S S Sateeshchandran, in his 64 page order, quashed the FIR against Achuthanandan, the first accused in the case, and all further proceedings against him.
The case pertains to alleged violation of norms while allotting 2.33 acres of land to T K Soman, an ex-serviceman and Achuthanandan's close relative, in Kasaragod district when he was Chief Minister heading the LDF ministry during 2006-11.
Apart from the 88-year-old leader, his personal assistant Suresh and former Revenue Minister K P Rajendran (CPI) and a couple of officials have been listed as accused in the FIR filed in a court in Kozhikode after a vigilance probe found prima facie evidence.
Achuthanandan had filed a petition, seeking quashing of the FIR.
Reacting to the verdict, Achuthanandnan said in Thiruvananthapuram that it was a 'mortal blow' to Congress-led UDF Government and its attempts to frame him in a corruption case.
Chief Minister Oommen Chandy said government would go ahead with legal proceedings in the case and denied it had interfered in the case with political intentions.