A five-judge constitution bench headed by Chief Justice R M Lodha directed the Kerala government not to implement the Kerala Irrigation and Water Conservation (Amendment) Act, 2006.
It also appointed a three-member committee comprising representatives of the Centre and the governments of Tamil Nadu and Kerala to supervise safety of the dam periodically.
It empowered the committee to issue directions for ensuring the safety of the dam.
There had been differences between the two states over the safety of the dam. While Tamil Nadu contended the dam was safe and its water level had to be raised from 132 feet to 136 feet, Kerala maintained that the structure was weak and needed to be replaced.
As tension between the two states rose in December 2011, a two-member technical team of the apex court-appointed Empowered Committee had visited the site and concluded that recent tremors in that region did not have any impact on the dam and that it was safe.