Chidambaram facing the charge of poll irregularities should resign forthwith and if he failed to do so, the Prime Minister should drop him from the Cabinet, she said.
Referring to the court observation that Chidambaram should face the case, Jayalalithaa said in this context, "Chidambaram remaining as Home Minister will be a blot on Indian democracy".
"AIADMK's stand on the issue is that Chidambaram won the election in a fraudulent manner", the Chief Minister said in a statement reacting to the Madurai Bench of the high court declining to dismiss a petition challenging his election to the Lok Sabha in 2009.
The AIADMK supremo recalled her earlier charge that Chidambaram did not win the election in a democratic way and in fact he was defeated. She had also sought his resignation earlier.
AIADMK candidate R S Raja Kannappan, who lost to Chidambaram by a little over 3,500 votes, had challenged the election with "irrefutable documents", she said.
She claimed Chidambaram "out of fear to face the case" had moved the court for dismissing the election petition "only to delay the process".