Acting on a plea filed by a lawyer, Kottayam Special Vigilance Court judge V Dileep directed the bureau to file its report in a month.
The judge also dismissed the contention made by the state government that Chandy did not carry out illegal land filling in the paddy fields.
In his petition, Subhash, a lawyer, alleged that Chandy illegally carried out land filling on one km stretch through the middle of a paddy field to construct a road to the lake palace resort owned by Water World Company which is headed by him.
Chandy has been facing allegations for allegedly filling paddy fields for the construction of a parking space and encroaching Marthandam backwaters.
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Chandy, a nominee of the NCP in the CPI(M)-led LDF government, has been under attack from the Congress-led UDF opposition and the BJP ever since the allegations surfaced some time back.
Stepping up its demand for Chandy's resignation, opposition alleged there was "mystery" behind Chief Minister Pinarayi Vijayan protecting the transport minister even after the revenue minister had accepted the district collector's report that "found serious violation of rules".