Strongly backing the transport minister, the NCP dismissed as "baseless and false" the accusations against Chandy.
Reddy had reportedly urged the ruling CPI(M)-led LDF government in Kerala to take action against Chandy, alleging that he had misused his authority as a minister.
Both CPI and NCP are constituents of the LDF government.
NCP National General Secretary Praful Patel said in a release here that he had seen the statement in the media made by Reddy on allegations against Chandy.
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He said NCP was "fully confident that the innocence of the minister will be fully vindicated" and all facts come before the public.
Upset over the CPI leader's charges against him, Chandy had said he was clean and it might be Reddy who was corrupt.
Chandy has been under attack from the Congress-led UDF opposition and the BJP ever since the allegations surfaced.
Chandy, a businessman-turned-politician, joined the ministry in April following the resignation of A K Saseendran.