Responding to the ruling, Manmohan Singh said: "I respect the court judgment and I will speak in the house."

Bharatiya Janata Party (BJP) leader Sushma Swaraj had placed her opposition to his appointment on record at a Sep 3, 2010 meeting. But the government overruled the opposition and appointed him to the post.

An apex court bench headed by Chief Justice S.H. Kapadia was giving its verdict on a petition by the Centre for Public Interest Litigation (CPIL) challenging Thomas' appointment.

The petitioner had said that Thomas, a 1973 batch Indian Administrative Service officer of Kerala cadre who was earlier the telecom secretary, was facing a criminal chargesheet in a case related to palm oil import in Kerala and that he was not an "outstanding civil servant of impeccable integrity".

"We are not in any position to say anything now. He has tendered his resignation and the Supreme Court also held his appointment illegal," Law Minister M. Veerappa Moily told reporters.

He denied that the order had left the government red faced as the appointment was made by a panel of which opposition leader Sushma Swaraj was a part.

Thomas was Kerala's civil supplies secretary in 1992 when the alleged palm oil scam took place.

A case was registered in 1999, accusing Thomas and others of criminal conspiracy and causing a loss of Rs.2.32 crore to the exchequer. They were accused of importing 15,000 tonnes of palm oil from Malaysia at an inflated price for distribution through fair price shops.

The apex court said institutional integrity and functioning were more important than personal integrity though both were related.

It said it was incumbent upon the high-powered committee to keep in mind the institutional integrity while making the recommendation of the CVC and it should be according to the law.

The ruling - the latest blow to the government fighting a series of corruption scandals, including on the allocation of 2G spectrum and the Commonwealth Games - provided the opposition just the ammunition it was looking for.

The BJP and the Janata Dal-United (JD-U) said the Supreme Court decision was a victory against corruption. They called for Chidambaram's resignation on moral grounds.

"As home minister, his duty was to present the right facts but they concealed facts on the allegations against Thomas," BJP leader Murli Manohar Joshi said outside parliament, where the budget session is in progress.

"Even when (Sushma Swaraj) brought it to their notice that Thomas' name was involved in a corruption case, they ignored it," he said.

Toeing the same line, Janata Dal-United leader Sharad Yadav said the step was a victory for the movement against corruption.

"The home minister should take moral responsibility and resign. The removal of CVC is a victory for the movement against corruption," he said.

Communist Party of India leader D. Raja said: "It was a government elected CVC as the main opposition party was opposed to him, so it is a blow to the government."

Communist Party of India-Marxist (CPI-M) leader Sitaram Yechury added that the prime minister must explain the government's stance.

"The prime minister needs to answer in parliament how they went ahead despite all the facts known to everybody... even the leader of opposition objected. They have to answer. He needs to explain," said Yechury.

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