After several rounds of meeting with Tamil Nadu election officials, the Election Commission decided to rescind the election notification.
It said the by-election will be held in "due course when the vitiating effect created by the distribution of money and gift items to allure the electors...gets removed with the passage of time".
"The Commission is fully satisfied that the current electoral process...in Tamil Nadu has been seriously vitiated on account of unlawful activities of the candidates and political parties and their workers by bribing the electors and unlawfully inducing them by offering money and other gifts of consumable items to woo them in their favour," the EC said in an order late tonight.
Sleuths of the Income Tax Investigation wing conducted searches in properties and offices belonging to Tamil Nadu Health Minister C Vijayabaskar on Friday across Tamil Nadu.
The searches on premises of an associate of Vijayabaskar has revealed routing of Rs 89 crore for "distribution to voters" in R K Nagar Assembly constituency.
Vijayabaskar is a loyalist of AIADMK (Amma) faction's candidate T T V Dinakaran.
Vijayabaskar, who is the first state minister to come under the lens of taxmen, is among the key campaigners in the bypolls.
There were also several complaints of alleged money distribution by AIADMK's Amma faction.
The seat fell vacant after the death of the then chief minister J Jayalalithaa on December 5 and the bypoll is being viewed as a battle of prestige for the two factions of the AIADMK. The AIADMK (Amma) faction is led by V K Sasikala. The other faction is led by former chief minister O Panneerselvam.
"Many complaints were received by the ECI on possibilities of inducement of electors by distributing cash and gifts in innovative forms like tokens, prepaid phone recharge coupons, newspaper subscription, milk tokens, money transfer in no frill accounts in banks and even mobile wallet payment to mobile numbers," the EC said.
"Generally in an assembly constituency, only 3 FSTs (Flying Squad Teams) and 3 SSTs (Static Surveillance Teams) are deployed during any election, but for the R K Nagar constituency, the deployment of these squads was increased manifold and total of 61 teams were deployed keeping in view the sensitiveness of the constituency and past experience." it said.
On May 27 last, the EC had recommended to the Tamil Nadu Governor to cancel the notification to hold polls to the Arvakurichi and Thanjavur Assembly constituencies following evidence that a large sum of money was used to influence the voters there.
Tamil Nadu had gone for Assembly polls on May 16 last year after which the AIADMK returned to power for a second consecutive term.
The Commission had used its constitutional powers in March 2012 recommending to the President cancellation of the notification for a Rajya Sabha biennial election from Jharkhand even after the polling had concluded after it found that money was used to influence voters.