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The second legislative council election to Madras Presidency after the establishment of dyarchical system of government by the Government of India Act, 1919 was held in 1923. Voter turnout was higher than the previous election. Swarajists, a breakaway group from Indian National Congress participated in the election. The ruling Justice Party had suffered a split, when a splinter group calling themselves anti-Ministerialists left the party. It won the highest number of seats but fell short of a majority. Nevertheless, Madras Governor Willington invited it to form the government. Incumbent Justice chief minister Panagal Raja was nominated by party leader Theagaraya Chetty to continue as chief minister for a second term. The government survived a no-confidence motion (with the support of non-elected members), brought against it on the very first day of its tenure by the opposition headed by C. R. Reddy.
Constant infighting within the Justice Party led to the creation of a group calling themselves anti-ministerialists. This group included notable members like C. Natesa Mudaliar, T. A. Ramalingam Chettiar, C. R. Reddy and P. Subbarayan. They challenged Theagaroya Chetty's leadership alleging that he was exercising autocratic control over the party. Chetty's support for British oppression of the Non-cooperation movement was disapproved by members of his party including Subbaroyan and R. K. Shanmugam Chettiar. Inclusion of no Tamil members by Theagaroya Chetty in the ministry caused resentment among Tamil members. Members of the previous ministry Raja of Panagal and Kurma Venkata Reddy Naidu were Telugu members and A. P. Patro was from Orissa. Theagaroya Chetty also had Telugu ancestry.