Mathews Mar Athanasius consecrated Thomas Mar Athanasius of Palakkunnathu Family, son of Abraham Malpan as his successor in 1869. In 1876, there was held a Synod at Mulamthuruthi presided over by the Patriarch of Antioch, Moran Mar Pathros who was on a visit to Malabar. This helped to tighten his hold over the Syrian Church in temporal as well as in spiritual affairs. Mathews Mar Athanasius Metropolitan and his followers inspired by the reformation were of course opposed to this policy. Thomas Mar Athanasius Metropolitan as the leader of the reformed section of the Church followed in the footsteps of his predecessor and eventually he was involved in a litigation, lasting for over 10 years regarding his title to the possession of the ‘Syrian Seminary’ and allied properties of the Church. In the court of final appeal, two Hindu judges decided in favour of Joseph Mar Dionyasius as representing the Patriarch, but the English judge, Mr Justice Ormsby dissented from their findings.

The contention of Mar Dionysius who represented the unreformed Jacobite Church was that the consecration of Thomas Mar Athanasius was invalid as it had been done without the permission of the Jacobite patriarch, held to be the supreme head of the Syrian Church in Malabar. The plea of Thomas Mar Athanasius was that the Syrian Church in Malabar was an independent Church though having friendly relations with the Jacobite Patriarch and that therefore, there was nothing wrong in his having been consecrated by his predecessor without any reference to the Patriarch. The majority judgement held that the Syrian Church in Malabar was under the jurisdiction of the Jacobite Patriarch. Thus the cause of the independence of the Syrian Church sustained a blow for the moment. This was a temporary setback as later history showed, for the independence of the Syrian Church has now come to be accepted as a valid principle by the Orthodox Church (The earlier unreformed later took up the name Orthodox) as well.

The result of the judgement in the ‘Seminary Suit’, as it is sometimes known, was that the Church was divided into two sections: one, the Jacobite Church and the other the Mar Thoma Church. The Mar Thomites having lost their claim to property had to start from scratch, building churches and organizing themselves as an independent body. This was no easy task. The earnestness and spiritual fervor of the leaders, lay and clerical, stood them in good stead. Their evangelistic zeal found expression at this time in the formation of the Mar Thoma Evangelistic Association in 1888. Though the episcopate of Thomas Mar Athanasius was a period of trial and suffering for the Church, it was also one of great spiritual promise for the future. The Mar Thoma Church considers itself as one carrying on the original traditions of the Malabar Church, reformed in accordance with the teaching of the New Testament.