THIRUVANANTHAPURAM: A company donating to a political party and a company paying a politician are two different things under Indian law. The distinction is now central to the CMRL payoff controversy, after Minister K Muraleedharan described the alleged payment linked to him as an “election fund”.
According to legal experts, Indian law has a clear framework for corporate contributions to parties. It does not automatically give the same status to a direct payment to an individual political leader. Section 29B of the Representation of the People (RP) Act allows parties to receive voluntary contributions from individuals and companies. Contributions above Rs 20,000 must be disclosed to the Election Commission under Section 29C. The ECI publishes these contribution reports.
Corporate political contributions are also regulated under Section 182 of the Companies Act. Companies must follow prescribed procedures, including board authorisation and disclosure in their accounts. The law provides a formal route for political-party funding. That creates a paper trail. A company makes a contribution, the party accounts for it and qualifying contributions are reported to the ECI.
A direct payment to a politician is different. It does not automatically become political contribution simply because it is described as “election fund”. Its legal character would depend on the circumstances, the recipient and how the money was accounted for.
“The RP Act does not recognise an entity called political leader. It refers only to political parties. Merely being a politician or an office-bearer of a party does not give the person any exemption to receive funds under the Act,” opined Harish Vasudevan, advocate and activist.
The distinction becomes sharper when the recipient is a public servant. Section 7 of the Prevention of Corruption Act prohibits a public servant from accepting an “undue advantage” for improperly performing or withholding a public duty. Section 11 also deals with an undue advantage obtained without consideration from persons connected with the public servant’s official functions.
Legal experts said using the phrase “election fund” in the CMRL pay-offs episode does not settle the legal question. “The crucial distinction is whether the money was a documented political contribution or a payment to an individual linked to an official favour,” they pointed out.
TNIE explains
Parties can legally receive corporate contributions
Contributions above J20,000 must be informed to ECI
Companies must follow disclosure and authorisation rules
Direct payments to politicians get no automatic exemption
Official favours can trigger corruption law scrutiny
