In a setback to the Pinarayi Vijayan government, the Kerala High Court on Tuesday dismissed a petition by state Transport Minister Thomas Chandy for quashing the Alappuzha district collector's report which alleged large-scale land grab by him to build a plush resort.

The division bench of the court of Justice P.N. Ravindran and Justice Devan Ramachandran came down heavily on Chandy and observed that it was very strange what a state Minister has filed a petition against the state government "which questions the failure of the collective responsibility of the cabinet".

Through the judgment, Chandy has lost all hope of continuing as a Minister.

Chief Minister Vijayan told the media that the decision of Chandy's Nationalist Congress Party (NCP) is awaited. "We will look into the complete judgement and the right decision would be taken at the appropriate time," he said.

Vijayan had come under fire from several quarters for protecting Chandy, much against the wishes of the other allies of the Left Front government.

Ever since the allegation of land grab surfaced three months back, the Congress-led opposition, the BJP and even the second biggest ally of the Vijayan government - the Communist Party of India - had been demanding the resignation of Chandy.

Vijayan had very strongly defended Chandy on the floor of the Assembly.

Leader of Opposition Ramesh Chennithala told reporters in Palakkad on Tuesday that it's surprising that while Vijayan was quick to get the resignation of his close aide E.P. Jayarajan and A.K. Saseendran, in Chandy's case that did not happen.

"This clearly shows that the 'money power' of Chandy holds sway and Vijayan has a soft corner for him," said Chennithala.

NCP state acting president T.P. Peethamabaran said a decision on Chandy would be taken by the NCP parliamentary board.

"We stand behind Chandy, but the final decision rests with the Chief Minister," said Peethamabaran.

"The Left Democratic Front has entrusted Vijayan to take the appropriate decision," said State CPI secretary Kanam Rajendran.

The controversy over Thomas Chandy's alleged land grab surfaced after Alappuzha district collector T.V. Anupama submitted a report in August saying that portions of the Marthandam Lake had been usurped for building the Minister's plush Lake Palace Resort, besides a paddy field was levelled for a parking lot for the resort.