A sessions court in Lakshadweep sentenced Faizal and three others on January 11 for attempting to kill the son-in-law of the late union minister P M Sayeed during the 2009 Lok Sabha elections.
In January of this year, Faizal was disqualified as an MP after being convicted in an attempted murder case in the union territory. However he was reinstated based on a stay order by Kerala HC.
The court said the Kerala HC had failed to consider the true position of law with respect to the manner in which application for stay of conviction must be considered.
The top court said the approach of the high court was "erroneous" in suspending the conviction and sentence of the Lok Sabha MP in the case.
The Congress and NCP had organised protests in the islands on Friday.
Sale of alcohol was banned in the islands in 1979 under the Liquor Prohibition Regulations based on demand from the community to preserve their culture.
Justice P V Kunhikrishnan clarified that the UT Administration of Lakshadweep is free to frame rules in tune with Article 235, if necessary.