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The second legislative council election to Madras Presidency after the establishment of diarchical 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 First Minister Panagal Raja was nominated by Party leader Theagaraya Chetty to continue as First Minister for a second term. The government survived a no-confidence motion, brought against it on the first day of its tenure by the opposition headed by C. R. Reddy.
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