Removing Sasikala and her family members from the party, and ordering a probe into Jayalalithaa's death were the two key demands raised by the "OPS group", which broke away to form a separate outfit, AIADMK (Puratchi Thalaivi Amma), in February.
A resolution signed by 27 office bearers including Palanisami, adopted at a meeting convened at the party headquarters on Thursday, declared that Dinakaran's appointment violated party bylaws.
Former chief minister Panneerselvam had last week said that the leaders in the rival camp were "only making comments" on the unification, but not making much effort.
Thursday's resolution also stated that Dinakaran can not hold any position in the party, according to its bylaws, since he had failed to maintain his primary membership for five years following his ouster by J Jayalalithaa, the party leader who died in December 2016. He also cited precedence to counter the charge by both OPS and EPS factions that his return to the party was illegal because he had been removed by Jayalalithaa long ago.
With Palaniswami and Paneerselvam arriving in Delhi on Thursday evening to take part in Friday's swearing-in ceremony of new Vice-President elect Venkaiah Naidu, there was speculation as to whether they could have a meeting of sorts to thrash out the sticky points standing in the way of a merger.
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Faction leader Manoj Pandian said they filed an affidavit in the Commission on Friday.
Down South, the BJP is also preparing to get into a more dominant position if not capture power and it is in Tamil Nadu. He has also said that he will go ahead with his plan of a State-wide tour starting from Madurai on August 14.
He said the ruling faction would come to grief, hinting that MLAs owing allegiance to Sasikala could cause problems in a trial of strength in the Tamil Nadu assembly. Sasikala was not just an aide to Jaya, but the mover and shaker within the party and the government.
The developments that followed has now led to a third faction led by TTV Dinakaran, deputy general secretary and Sasikala's nephew. In fact, in April itself some of the ministers had "ousted" Dinakaran and his family from the party, but there was no follow up action to formalize the decision.