Former tourism minister A P Anil Kumar will also face a probe by the inquiry commission and special judge (vigilance) in the case.
The complaintant, P Rajeevan, a BJP activist, alleged that several appointments were made violating guidelines.
The medical college was set up under the Scheduled Caste department.
The probe is against six persons, including Chandy and Anil Kumar.
The court asked vigilance investigation team to submit a preliminary report by September 19.
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