The CBI had filed charge-sheets against nine accused in the Rs.374 crore scam related to the Canada-based SNC Lavalin company in June 2009.
Vijayan, as the state power minister, had inked the final agreement in 1997 for renovating three power plants in the state with SNC Lavalin.
He was arraigned as the seventh accused in court. He however approached the CBI court with a discharge petition saying he has done no wrong.
In its statement to the CBI court, the premier investigating agency said that Vijayan had made a trip to Canada to finalise the agreement but no expert accompanied him.
The CBI also pointed out that Vijayan went ahead with the agreement despite being cautioned against doing so by the then power secretary.
CBI court judge R. Reghu termed the CBI's charge-sheet baseless and accepted Vijayan's petition.
Vijayan was on bail when the court order came.
The case generated huge interest because a CPI-M politburo member had to appear before a court to secure bail in a corruption case.
"This is a huge relief for him and the party. We were hopeful that the verdict would go in favour of him," said CPI-M central committee member M.P.Govindan, one of the closest aides of Vijayan.
Congress spokesperson Rajmohan Unnithan said he respects the court's decision.
--IANS (Posted on 05-11-2013)