Joseph, who won the prestigious honour for her novel 'Aalahayude Penmakkal' (Daughters of God the Father), said she would soon send the cash prize and plaque to the Akademi by courier.
"An alarming situation is being created in the country in all spheres of life after the Modi government came to power. The religious harmony and secularism of the country is unprecedentedly under threat," she told PTI from Thrissur.
Joining the group of writers registering their protest, eminent poet Satchidanandan resigned from all committees of the Sahitya Akademi, saying the literary body had "failed" in its duty to stand with writers and uphold freedom of expression.
Satchidanandan was serving in the General Council, Executive Board and Financial Committee of the Akademi.
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Observing that the Sahitya Akademi was the "conscience keeper of the writing community", he said the literary body should actively condemn the killing of Kalburgi.
Parakkadavu also said he would also resign from his Akademi membership.
Today's developments have triggered a division in the state's literary circles with writers coming out for and against the issue.