The NCP leader said he would move the Supreme Court against the Kerala High Court's observations against him. The high court had dismissed Chandy's plea to quash an inquiry report that indicted him in connection with the land grab allegations.
"Without any basis, not even one per cent of truth, a (TV) channel had telecast reports against me. Later, other channels followed. But the LDF and NCP leadership did not see it seriously," he told reporters at his home town here.
The resignation was accepted by Governor P Sathasivam.
Chandy, a businessman-turned politician, travelled in his official car from Thiruvananthapuram after resigning, drawing another round of criticism from various sections.
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Youth Congress activists was seen hurling eggs and waving black flags as his motorcade passed by near Alappuzha.
Chandy claimed there were some "errors" in the Alappuzha district collector's report which had held that there were large-scale violations of land rules. The NCP leader had blamed revenue officials for the same.
The NCP leader made it clear that his lawyers would file an appeal in the apex court tomorrow against the high court observations due to which he was forced to resign.
Chandy is the second NCP MLA to resign from the state cabinet after A K Saseendran quit after a sleaze audio clip featuring the latter went viral.
Meanwhile, Peethambaran said whichever party MLA gets his name cleared first by a court of law, will return as minister.
Asked if the Nationalist Congress Party (NCP) was unhappy over four CPI ministers' decision to keep away from today's cabinet meeting as Chandy was attending it, Peethambaran said "We have nothing against them. We are not saying whether what the CPI did was right or wrong. You can ask them".