The government issued an order which would be presented in the court.
Initially, Chief Minister Oommen Chandy was also named in the case but he got a clean chit from the Kerala High Court in June.
The import of 15,000 tonnes of palm oil was undertaken in 1992 and the case was registered in 1999 when the Communists led by E.K. Nayanar were in power.
Former chief minister K. Karunakaran, then food minister T.H. Mustafa and bureaucrats P.J. Thomas and Jiji Thompson were charged with causing a loss of Rs.2.32 crore to the government by importing oil from Malaysia at an inflated price.
Chandy's name figured in the case as he was the finance minister in the Karunakaran cabinet.
An unsuccessful attempt to withdraw the case was made in 2005 by Chandy, who was the chief minister at that time.
The trial court in May last year accepted a report of a vigilance probe that gave a clean chit to Chandy. The decision was upheld by the high court.
The vigilance probe team had concluded that Chandy had no role in the import of palm oil, even though he was the state finance minister.
Karunakaran's son, K. Muraleedharan reacting to the government decision Tuesday to withdraw the case was a good news.
Former finance minister Thomas Issac of the Communist Party of India-Marxist protested against the decision and said they will take up the issue in an appropriate manner.
--IANS (Posted on 24-09-2013)