The case was filed by Dravidar Vidhuthalai Kazhagam (DVK).
While hearing the case the court wondered why the petitioner had approached it within 15 days of lodging a police complaint.
At this state the counsel for the petitioner sought the court's permission to withdraw the petition and the court dismissed the same.
At the Tamil magazine Thuglak's 50th anniversary function, Rajinikanth had said that "in 1971, naked images of Lord Rama and Sita were allegedly displayed in a rally led by Periyar in Salem". He said that whatever happened in that rally was reported by the media at the time.
The followers of the social activist, who started the 'self-respect movement' and founded DK, said that Rajinikanth's comments were an insult to Periyar.
While some groups have demanded an apololgy from Rajinikanth, the actor has categorically refused to do so.
Speaking to reporters outside his residence recently, Rajinikanth showed some photocopies of media reports in support of his comments and said that he will not apologise.
The DVK has registered a complaint with the Coimbatore police against Rajinikanth for defaming the DK founder.
The DVK complained that Rajinikanth's statement was false and urged the police to file a case against him.
The DVK also threatened protests outside the theatres showing the actor's latest movie "Darbar" if he did not apologise.
The DK followers does not agree with Rajinikanth's statement that naked images of Lord Rama and Sita were allegedly displayed in a rally led by Periyar in Salem.
On the other hand, they agreed that the image of Lord Rama was beaten with a slipper that was allegedly thrown at the rally.
( With inputs from IANS )