The decision of the Bharatiya Janata Party-led government to seek dissolution of the assembly and the chief minister's resignation left the situation wide open for Governor Syed Ahmed to decide the future course of action. He was said to be consulting constitutional experts.
BJP's ruling coalition partner JMM, in a letter to the governor, formally withdrew its support to the 28-month-old government pushing it into a minority.
Munda, on the other hand, met the governor and resigned.
Later, he told reporters, "I have submitted the cabinet's decision recommending to the governor dissolution of the House along with my resignation."
His cabinet colleagues Gopal Krishna Patar of the Janata Dal-United, Chandraprakash Choudhary of the All Jharkhand Students Union and several BJP MLAs were present when Munda submitted the letter at Raj Bhavan at 11.45 am.
The governor, he said, would decide on the recommendation for dissolution of the House. "I have run the government with stability for the last two years. Dissolution of the House and seeking a fresh mandate is the alternative presently," he said.
The decision on recommending dissolution of the House has taken at a cabinet meeting held this morning to prevent any 'horse trading-like situation', Munda told PTI before going to the Raj Bhavan.
"Seven ministers (of the coalition government) were present in the cabinet meeting and it was decided to recommend dissolution of the state assembly," he said.
No JMM member was present at the meeting.
The decision, he said, was taken as no national party had openly come forward to provide an alternative government in the wake of the JMM's announcement to pull out of the government.
Jharkhand has witnessed fast-paced political developments after the BJP rejected all demands of JMM including handing over of power as per an 'accord' on rotational leadership of the coalition.
JMM leader and Deputy Chief Minister Hemant Soren, who submitted to the governor the letter withdrawing support to the Munda government, said in Ranchi that the cabinet recommendation on dissolution of the House 'did not stand' as the party had announced its decision to pull out on Monday itself.
"We have submitted the letter to the governor and informed him that JMM's withdrawal of support has reduced the government into a minority," Soren told the media.
He was accompanied by his father JMM supremo Shibu Soren and other party leaders to the Raj Bhavan.
The Congress said in Delhi that Jharkhand cabinet's decision recommending dissolution of the assembly was "not binding" on the Governor as it was done by the Munda government after being reduced to a "minority".
"It is not binding on the governor to accept the recommendation of a minority government. It was crystal clear that the BJP-led government had been reduced to a minority after withdrawal of support by JMM," senior leader Shakeel Ahmed said.
In the 82-member state assembly, the BJP and JMM have 18 members each. The Munda government had the support of six members of All Jharkhand Students' Union, two of the Janata Dal-United, two independents and one nominated member who has voting right in a trial of strength.
The Opposition Congress has a total of 13 members, Jharkhand Vikas Morcha-P 11 and RJD five in the assembly. The Communist Party of India (Marxist-Leninist) Liberation, Marxist Coordination Party, Jharkhand Party (Ekka), Jharkhand Janadhikar Manch and Jai Bharat Samta Party have one member each besides an independent.
The Congress appears to be in no hurry to put together a new government in Jharkhand after the fall of Arjun Munda-led BJP ministry and could prefer a brief spell of President's rule in the state.
The JMM, however, is learnt to have approached some leaders in Congress to explore formation of a new government in the state but the latter is learnt to be in favour of being cautious.
The Congress' caution stems from the fact that it had burnt its fingers by supporting independent Madhu Koda-led government in the past as it had to face public criticism for the irregularities that happened in Koda administration, party sources said.
Pressure is also mounting on the Congress high command from the state party leaders with at least eight MLAs arriving in the national capital to nudge the senior leaders to agree to a new political option.
"The JMM is approaching the Congress. If they want to talk, why can't we? They are our allies at the Centre. They had voted with us twice in Parliament. The state unit of Congress is not in favour of the President rule or the dissolution of the assembly. We have apprised the AICC in-charge of Jharkhand of our views. Now a decision has to be taken by the central leadership. We will accept whatever they decide," Congress Legislature Party leader of the state Rajinder Prasad Singh told PTI.
However, Congress spokesperson P C Chacko said in New Delhi, "The state unit of the Congress has not taken any decision. No political decision has been taken either by the state unit or by the central leaders on the issue."
The Congress is likely to use a brief spell of President's rule to prod the JMM to come to some "reasonable agreement" with it.
On the other hand, the BJP said this is not the time for President's rule or keeping the assembly in suspended animation and fresh elections are the only way out to provide a stable government in Jharkhand.
BJP central leaders were of the view that since the chief minister had submitted his resignation letter and suggested to the governor dissolution of the assembly before Shibu Soren gave the withdrawal of support, Munda's advice should be followed and fresh elections held.
"The only way out in Jharkhand political imbroglio is to dissolve the Assembly and conduct fresh elections. Munda has already recommended the dissolution of the assembly as no party enjoys a clear majority and a fresh election is the only alternative," BJP spokesperson Prakash Javadekar told reporters in New Delhi.
The party denied there was any agreement with the JMM on each party ruling for 28 months. It said there was "no truth" in reports that the JMM was to take over the government with the BJP becoming a junior partner from January 10.