The government had sought the AG's legal opinion after the collector T V Anupama in her report stated there was large-scale violation of the Kerala Land Conservation Act and Conservation of Paddy Land and Wetland Act by the Water World Tourism company, in which Chandy is a board member.
"AG's legal opinion has been received and it has been sent to the Chief Secretary," Chief Minister's Office (CMO) sources told PTI.
The Marthandam backwaters near the luxury hotel had been reclaimed for a parking area and a road had been constructed through the paddy field to the resort, violating norms.
The LDF is meeting here on November 12 and is expected to discuss the AG's report and take a decision on the matter with pressure mounting on the government from the opposition seeking Chandy's resignation.
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However, NCP sources said they would take an appropriate decision on the Chandy issue after the AG's report comes out.
Marches taken out by Youth congress workers at Alappuzha demanding Chandy's resignation allegedly turned violent today with police using lathis to chase them away.
Activists of the Revolutionary Youth Front also took out a march here and were chased by police who used water cannons.
Chandy had yesterday moved the Kerala High Court seeking action against the collector for filing a report against his companys alleged reclamation of paddy field for constructing a road to his lake resort.
In his petition, Chandy alleged that all sorts of "wild and baseless" allegations were raised against his Water World Tourism Company targeting him "with the set agenda orchestrated" by his political rivals, interested parties and the media.