Here are the latest developments in this big story.
Mr Palaniswami, who took oath two days ago, had moved the motion seeking a vote of confidence this morning but opposition members disrupted voting, angry that the Speaker did not allow a secret vote. He also turned down their demand that the vote be delayed.
Mr Palaniswami, 63, is the proxy of AIADMK chief VK Sasikala who could not become Chief Minister because the Supreme Court convicted her for corruption and sent her to jail.
The Chief Minister had to prove that at least 117 legislators in the 234-member state assembly back him. But the numbers changed in Mr Palaniswami's favour once the Speaker evicted DMK's 88 members and the Congress' eight members also walked out in protest. This reduced the effective strength of the house to 134, also lowering the number of votes that the Chief Minister needed to hold on to his seat.
Mr Panneerselvam, or OPS, who says he was forced to resign as Chief Minister last week, has consistently alleged that most of the party's MLAs were kept in "captivity" by Ms Sasikala at the five-star resort near Chennai. He made the same point in the assembly today.
OPS - who had visited the Jayalalithaa memorial at Marina beach early today - made it clear he had not given up. "There is still time for justice... in the end justice will win," he said.
Some AIADMK legislators had complained in the assembly that they were restrained against their will at a resort where Ms Sasikala had sequestered them since last week to prevent defections.
A whip issued by the AIADMK for all party legislators to vote for Mr Palaniswami made it tricky for those supporting Mr Panneerselvam. They could have been disqualified as MLAs under the anti-defection law for voting against the party.
But the Panneerselvam camp holds that any order from VK Sasikala, whose appointment as interim general secretary they have challenged, is invalid and so the anti-defection law will not apply. The OPS Camp has petitioned the Election Commission, which has sought Ms Sasikala's response by the end of the month.
Mr Panneerselvam, sworn in after the AIADMK's powerful leader J Jayalalithaa died in December as chief minister, resigned last week to facilitate a takeover of the top post by Ms Sasikala, Ms Jayalalithaa's closest companion for decades.
When Ms Sasikala was convicted, she pushed her loyalist Mr Palaniswami for the post and he took oath along with a 30-member cabinet on Thursday.
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