During this period Communist Party of India started different attitude towards national movement. They started anti Jap movement in Travancore. In Pala also they opened a Branch of anti Jap movement. Many congress workers attended their classes. Comrade Shri M.N. Govindan Nair regularly conducted classes. They did it for garnering support for Allied forces of Second World War of which Soviet Union was a part. Initially Chandy attended the meetings; he and others left it, when communists condemned “Quit India Movemnt”. The anti Jap movement considerably weakened Meenachil Taluk congress. Some left congress and Joined Communist Party. Mathai Chandy’s health started deterioting and he stopped his business at Pala town and moved the business to his residence. He obtained a license for ration shop. Soon Mathai Chandy’s health deteriorated further.  He expired in July 1945 and Chandy had to bear the burden of entire family at the age of 24. Chandy changed ration shops licence in his name. Those days ration distribution involved lot of corrupt practices. Chandy fought against these corrupt practices. Huge amount of donations were collected from dealers for Maharajas birth day. Chandy refused to Pay. Travancore State secretary issued a notification cancelling Chandy’s ration license; citing Mr. Chandy was engaged in subversive activities against State of Travancore.Mr.R. V. Thomas was dictator of State Congress in Meenachil Taluk committee. Mr. P .T. Chacko was the secretary.  He moved to Kottayam for his law practice. R .V. Thomas appointed Prof: K. M. Chandy as the secretary of Meenachil Taluk committee of State Congress. Sree R. V. Thomas and Prof: K. M. chandy actively organized the freedom struggle in the taluk. They successfully conducted public congress meeting at Pala. This gave boost to congress organization. Divan immediately racked up an old case against Mr. Thomas; arrested and punished him for addressing Maharaja “him” (adhem in Malayalam).  Chandy was also a speaker in meetings addressed by R. V. Thomas. After his arrest the full responsibility of Taluk State Congress committee fell on the shoulders of Mr. Chandy. The arrest R. V. Thomas actually energized the congress. The congress workers became very active. There were several congress leaders in Pala and adjoining places. They were Mr. David Maha Pillai,who was trained in Mahatama Gandhi Asram and Dr. N. K. warrier, who participated in salt march and satyagraha. The youth leaders of Menachil taluk were Mr. T.V.  Joseph Thumbassery; Mr. I. D. Chacko Machianni; Mr. P. T. Chacko; Mr. R .T. Thomas; Mr. Chacko Kadambukattil; Mr. P. S. Gopalapillai; Mr. Mani J. Vettom; Mr. Vettoor , Raman Nair;Mr. K. V. John Koickal; Prof: V. J. Mathai;Mr. P. R. Achuthan; Dr. Thomas Ellamthottum; Mr. P. C. Joseph Puvathunkal and innumerable number of youngsters. The State Congress faced considerable financial crunch. The Second World War caused recession and scarcity. C.P. used these for tactical movement to weaken the Congress. Major Communal organization like NSS and SNDP moved out of the congress agitation for representative rule and religious leadership of Christian communities were not ready to oppose CP.  In these circumstances a large number youth began to move towards communists. I.D. Chacko was one that moved to anti Jap program of Communist Party of India. Sir C. P. Ramaswamy Iyer understood that the British rule is going to end soon. Sir C.P had good knowledge about laws. He argued that once British left India all covenants and agreement British Government entered with native rulers became null and void. Hence Travancore would become free.

On 16th January of 1946 he proposed ‘American model of administrative Reform’, which envisaged the Divan would be executive head, with an elected assembly. A swantra Travancore (Independent Travancore) without joining Indian Union was the idea behind this. Soon an order issued on 21st January extending the term of Divan Sir C.P. Ramaswamy  Iyer for five years. By this time Prof: Chandy moved from local politics to state level. He and other youth leaders argued that at any cost they should oppose this move. Many old leaders in the State Congress were not very keen to oppose Divan’s move for separate country. However, large numbers of Congress leaders were of the view a strong agitation and even a violent agitation was necessary to get democratic rule. These leaders included Mr. C. Kesavan; Mr. Kumblathu Sankupillai; Mr. P.T. Chacko; Prof: K. M. Chandy; Mr. Mathew Manniangadan; Ponnara Sreedharn; Mr. Cherian, J. Kappan and Mr. N. Sreekandan Nair. This group was of the opinion that the support of any group, which opposed CP should be sought. They even suggested that they could support Communist party, which already began organizing the labour and peasant community against Independent Travncore and ‘American Model.’ Senior leaders like Pattom Thannu pillai and T.M Verghese were of opinion that Communists would unleash violent agitation.  Mean while Meenachil Taluk Congress committee passed a resolution asking reorganization of state committee with Kumbaluthu Sanku Pilla as president and C. Kesevan secretary.  CP was carefully watching the situation and he thought of creating wedge between moderates and extremist. He selectively released leaders who were opposing Communist connection and arresting others one by one. Youth including Prof: Chandy came to the view that a showdown with the Government and Sir CP was inevitable and to prepare the congress workers they organized training camp at Koottickal near Mundakayam. The Congress workers of Meenachill and Kanjirapilli taluks attended the camp; R.V. Thomas also attended the camp. Several such camps were organized in different parts of the state.  Finally congress leaders agreed that Sir C.P was playing tricks to continue as Divan and delay democratic rule. They decided to oppose the ‘American Model’. Chandy moved around; organized several public meetings; and spoke against “Independent Travancore” and asked people to oppose it. By this time Divan decided to take action against Prof: Chandy.

A large number of Malayalam writers came forward supporting anti Swantra Travancore agitation. Sir CP became angry and banned their works. The writers were Mr. Ponnkunnam Varkey; Mr. Abhayadev; Mr. Kuttandu Ramakrishna pillai; Mr. Bodeswaran; Mr. Pandalam, K.P. Ambshi Naryana Pillai. C P announced new reforms for Private Educational institutions. This infuriated Christian managements. They were preparing for an agitation against Government. Congress decided to link agitation for democratic reforms with the agitation of Christian Managements so that large section non committed public could be brought under congress flag. Mr. P. T. Chacko and Justice Thriathu Kunji Thoman were arrested for taking part in the agitation. On January 20th a public protest rally took place at Pala. It was proposed that Justice Thariathu Kunji Thoman would preside. Justice Kunji Thoman was released from prison on the previous day in order to pacify the Christian community but Mr.Chacko remained in prison. Three lakh people participated in the rally. This was followed by public rally at Kanjiirapilli in which, Prof: Chandy proposed a pilgrimage to the tomb of St Thomas for the change of mind in Sir, CP. Mylapore, where tomb is situated happened to be CP’s native place. For this purpose a committee was constituted with Mr. Cherian J. Kappen as President. Prof: Chandy and Mathachan Kuruvinakunnel were entrusted with task of organizing pilgrimage on foot from Nagarcoil up to Ernakulam and then by Train. On 12th April 1946 the pilgrimage started with priests. Immediately the Government prohibited it. The priests were reluctant violet the order and court arrest.

By the middle of April 1946 Prof: Chandy received two orders from magistrates; one from Thiruvanathapuram magistrate and other from Kottayam magistrate. Both orders banned him from organizing public meeting and processions. In the first week of May Home Secretary Travancore Government issued an order prohibiting Prof: Chandy from meeting political leaders/workers` and any type of political or public activity. In Pala a public meeting was organized to protest against it. Defying the order Prof: Chandy attended the meeting. Soon another Congress meeting was also organized at Pala. Veteran National Congress leader Mr.Salve presided the meet. Prof: chandy attended this meeting too. On July Prof: Chandy was arrested from Pala. Mr. Kumbathu Sanku Pillai; Mr. C.Kesavan;  Mr.G. Nilakanta Pillai; Mr. Ponnkunnam Varkey ; Mr. D.C. Kizhakkemuri; Mr. Cheran J. Kappen and Mr.Mathew Manniankadan were also arrested. All these people had argued for starting agitation against Government along with Communist agitation.

Prof: Chandy was arrested on charges of violating prohibitory orders. The Pala court denied bail to chandy. Prof: Chandy was moved to Kottayam. He had to remain in Kottayam lock up till he got bail from high court. After two weeks he was again arrested under preventive custody rules and send to Pujappura central jail Thiruvanthapuram. When he arrived at central jail congress leaders like Mr. C, Kesavan; Mr. Kumblath Sanku Pillai; and Mr. G. Nilakanda Pillai were already there. Soon Matew, Maniangandan, Mr, Cherian J. Kappan; D. C. Kizhakkemuri, Ponnkunnam Varkey, Kottayam Bhasi and others arrived.  Prof: Chandy was the youngest among the prisoners. He was only 24 years old, when he became a prisoner.  Prof: Chandy got an opportunity to meet the senior leaders and interact closely with them. Mr C. Kesavan used to recite revolutionary songs to young prisoners, while Mr. Kumblam gave training in wrestling. The authorities decided to take Prof: Chandy to Kottayam to stand trial in court. The Co-prisoners collected money from their daily allowance and prepared feast with Prdaman/Payasam . Mr. Ponnkunnam Varkey was in charge of the fare well meeting and Mr. D. C. Kizhakkemuri made arrangement for feast. Prof: Chandy was kept in Kottayam Sub jail for two months. Mr. Thankappan and Mr. Sugunanthan were his co prisoners, who shared the same cell with him. They were Communist workers arrested on suspecting their involvement in Poonnappura-Vayalar apprising. They became friends. Prof: Chandy got opportunity acquaint with a number of communist leaders during his stay at Kottayam prison. This included Mr. K. C. Mathew and Mr. P.S.Sreenivasan. In Prof: Chandy’s opinion Poonnappura Vayalar up rising was due to social and economic causes; it deserved all respect as a freedom movement. Prof: Chandy was convicted for one and half year prison life in the month of Noember. He was moved to Thuvanathapuram Central jail. This time all his earlier jail mates were moved to B class cells. Soon his old friend Mr. K. Balakrishanan arrived and they were together in one cell. On 15th August 1947 India became independent. They celebrated the occassio in the jail. Since Travancore had not become part of independent India political prisoners were not released. Sir CP was coining with the idea of ‘independent Travancore’ and canvassed other native Kings for this. But the fate was against him. He was attending the Swathi Thirunnal Music Festival. Only royal family members and invited guest were allowed to attend the concert. The programme was conducted under strict police security. However, suddenly the electricity in the entire city went off; some brave fellow attacked Sir C.P.Ramaswamy Iyer with sword. He struck two times. CP escaped because he was wearing protective metal coat under his clothes. The light was on after five minutes. Sir CP’s ear was injured and it was bleeding profusely. Immediately the armed police and army started combing operation. They arrested many and they could not get any trace.  After a few days; Sir C.P. Rama Swamy Iyer resigned secretly and left the Travancore Kingdom. All political prisoners released Prof: K.M. Chandy obtained his freedom in September1947.