The judge then directed the vigilance agency to hand over all relevant documents to the CBI
within a week.
The central agency has to conclude the preliminary investigation within three months, he said, adding if prima facie case is made out it could proceed further.
The DMK has alleged irregularities and corruption
in award of road contracts. It has accused Palaniswami of abusing his power and allotting projects worth Rs 35 billion to his relatives and 'benamis'.
Originally, the petitioner wanted the court to direct the DVAC to conduct a preliminary inquiry and register an FIR on its complaint submitted in June.
Later, he had moved an additional plea seeking transfer of the probe to an independent investigating team saying the DVAC was technically under the chief minister.
The court had on September 12 directed the DVAC to file a report on the day-to-day preliminary investigation conducted by it against Palaniswami on the complaint.
During the hearing on October 9, counsel for the petitioner said the party had lost confidence in the DVAC as the agency had been "supporting" the chief minister all along.
Refuting the charge, the advocate general appearing for the DVAC said the state vigilance agency had conducted a preliminary inquiry as per the procedures laid down and its findings had been forwarded to the vigilance commissioner.
He also said the highways department came under the chief minister while the DVAC was an independent authority under the administration of vigilance commissioner.