Kamal Nath had said he was "fully absolved" by the Nanavati Commission.
Veteran leader Kamal Nath being picked for the Chief Minister's post in Madhya Pradesh has triggered protests among the Sikh community. Its prominent leaders on Thursday evening warned the Congress of repercussions if Mr Nath, who, they say, had a role in the 1984 anti-Sikh riots, was chosen to head a state. The Congress already rules Punjab, and a section of the party, insiders say, was having second thoughts following the warning by the Sikhs.
Nearly 3,000 people died in November 1984 across the country, when large-scale violence broke out after then Prime Minister Indira Gandhi was assassinated by her Sikh bodyguards. There were allegations that senior leaders of the Congress were involved.
"Sikhs would launch a nation-wide protest if Kamal Nath is chosen as the Chief Minister in Madhya Pradesh," Akali Dal leader and lawmaker from Delhi Manjinder Singh Sirsa was quoted as saying by news agency Press Trust of India. He said he was "warning Rahul Gandhi of Sikhs' anger if he followed his family's tradition of rewarding butchers of 1984 Sikh genocide".
In June 2016, Mr Nath had stepped down days after being appointed the party's in-charge in Punjab. His appointment had drawn sharp reactions from the Akali Dal - which ruled the state at the time - and the Aam Aadmi Party. In multiple press conferences, both raised questions about his role in the riots.
In his resignation letter, Mr Nath said he was named in the case was in 2005 - more than two decades after the riots. He also said he was "fully absolved" by the Nanavati Commission, which was appointed to investigate the riots by the NDA government headed by Atal Bihari Vajpayee.
The senior Congress leadership picked Kamal Nath to lead Madhya Pradesh ahead of next year's national elections, but not without much resistance from the other contender for the post - Jyotiraditya Scindia. The 47-year-old is believed to have been offered the post of the Deputy Chief Minister, but he reportedly refused to scale down his demands.
Asked about the Akalis' warning, senior Congress leader Digvijaya Singh said, "35 years later this thing is being brought up. There is no case against him, there is no FIR against him. He has not been chargesheeted. Yet every time Kamal Nath-ji's name comes up, there is a slur campaign."
Mr Nath, he pointed out, had been appointed minister thrice since the anti-Sikh riots.
The Congress won 114 seats -- a shade short of majority -- in Madhya Pradesh, putting an end to the BJP's winning spree in the heartland state and is forming government with support from Mayawati. In view of next year's national elections, governance in the state and unity in the party, are expected to be key issues in the coming months.