The withdrawal followed strong protests by parishioners belonging to Karakkamala, which comes under the Manathavady Diocese in Wayanad district of Kerala.
According to reports, angry parishioners stormed a parish council meeting today, protesting against the action against the nun.
Sister Lucy had earlier said that she had been told to stay away from all her official duties, including teaching and conducting group prayers.
She said she was informed the decision was based on her participation in the protests and for making statements critical of the Church and its practices.
Reacting to the prohibition, the Sr Lucy had said: “Over the last few days, many people have asked me whether nuns faced any discrimination or limitations. The (disciplinary) action that I am facing should answer all such queries,” she said.
The move by the Church indicates that it is aware of the widespread dissatisfaction among the laity on the subject of Bishop Franco Mulakkal, who is accused of forcing a nun to perform sexual favors several times.
Mulakkal was arrested three days ago, nearly three months after an FIR was lodged by the Kerala Police.
Besides possible imprisonment, Franco Mulakkal may also face action from the Church in the future, including potential removal from his position as the Bishop of Jalandhar.