He also said the state government will showcase the precious wealth of the famed temple in a museum, if the Supreme Court agrees.
Chandy made this announcement in the state assembly after the Left opposition raised questions whether the precious temple wealth had been swindled.
"The image of the royal family should not be tarnished. The wealth that is now in the possession of the temple in itself shows the integrity of the royal family," Chandy said.
"This wealth is a boon for the state and if the Supreme Court agrees, we will set up a museum to showcase it," he added.
State Minister for Devasoms (the body responsible for overlooking temple administration in the state) V.S. Sivakumar denied there was any nexus between the royal family and the state government after the Left raised questions about the wealth being intact.
"The case filed by the royal family over the temple administration is coming up Aug 6. By then, the state government through an affidavit will decide its stand on the matter," said Sivakumar.
Former speaker of the assembly and CPI-M legislator K. Radhakrishnan said the wealth of the temple is an asset of the people.
He said the state should follow Reserve Bank of India guidelines and the interest generated from the wealth should be used to run temple affairs.
But Chandy said the temple's wealth was acquired during the time of the princely state's rule here and it happened before the country became independent.
A Supreme Court bench of Justice R.M. Lodha and Justice A.K. Patnaik had last month entrusted the administration of the temple to a five-member committee headed by a judge.
The decision was made on the basis of a report submitted by amicus curiae Gopal Subramaniam stating that things were not fine under the temple's present administration which was led by the Travancore royal family.
Also, former CAG Vinod Rai was asked by the Supreme Court to audit the properties, assets and accounts for the last 25 years of the temple.