Independent MLA P C George, representing Poonjar in Kerala Assembly, said he "displayed" the pistol when a "group of goons challenged" him while visiting 52 poor families staying near the estate at Mundakkayam.
Visuals aired by various television channels showed George standing amid some people and waving the pistol when they shouted slogans at him.
He alleged that such "hooliganism" was being done at the estate owner's behest to "evict them from their land."
"The goons used abusive language against me, when I advised women staying in the shelters to throw diluted acid at the elements abusing them at nights."
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"They (the goons) challenged me to take out the gun. I then displayed the Czech pistol I was carrying... Just to convince them that I am carrying one. It is a licenced gun," George, who won as an independent in the assembly polls last year, told PTI.
Some estate workers alleged that the MLA used abusive language against them leading to the melee.
Police said they have received no complaints.
A team of police officials have left for the place on hearing about the incident, police said.