Outlook Explains | Can The Government Freeze A Political Party's Bank Account?

The infighting within the Trinamool Congress has now spilled over to the party’s financial resources, with former West Bengal Sports Minister Aroop Biswas writing to HDFC Bank seeking a freeze on the party’s bank accounts.

In the letter, Biswas claimed that amid the tussle within the TMC, there was uncertainty over who was authorised to operate the significant funds held in bank accounts under the party’s name.

Outlook takes a look at what happens to a political party’s bank accounts when there is an internal split and what might happen in TMC’s case.

TMC’s Assets

Financial statements submitted by the political outfit to the Election Commission of India for the financial year 2024-25 show that it had funds worth more than ₹1,000 crore. Financial documents for the latest financial year are not yet publicly available.

The party declared fixed assets worth ₹7.15 crore, current assets worth more than ₹680 crore, and investments exceeding ₹250 crore.

The party also received donations amounting to more than ₹180 crore during the same period, while spending upwards of ₹130 crore on election-related expenses.

These financial records make the regional party one of the richest in the country and make the battle for control of its assets all the more significant.

Account Freeze Demand

The demand to freeze the party’s accounts came from Aroop Biswas, a leader once considered very close to Mamata Banerjee, who wrote to HDFC Bank requesting that the TMC’s bank accounts be frozen.

The former minister served as the party’s treasurer until the 2026 Assembly elections, where he lost the Tollygunj seat to the BJP. Following the defeat, former Rajya Sabha MP Subhasis Chakraborty was appointed party treasurer as part of a broader organisational overhaul aimed at rejuvenating the party after its crushing defeat.

In his letter, Biswas claimed that unauthorised persons could misuse the available funds and sought maintenance of the status quo until the dispute was resolved.

"At present, rival groups are claiming to be the legitimate representatives and office bearers of AITC, resulting in uncertainty regarding the authority of persons who may seek to operate the bank accounts maintained in the name of AITC," he wrote.

The former MLA cited the ongoing rebellion within the TMC and the dispute over control and management of the party as the reasons for writing the letter.

"It is further a matter of public knowledge that a substantial number of elected representatives of the party, including 20 out of 28 Members of Parliament and 58 out of 90 Members of the Legislative Assembly, have either left the Party or have openly revolted against the existing leadership. In these circumstances, a serious dispute has arisen regarding the authority, control and management of the party," he added.

Who Owns a Political Party’s Assets?

A political party is an independent institutional entity registered under Section 29A of the Representation of the People Act, 1951. As such, all assets held by a party are owned by the party as a separate legal entity, distinct from its members and office-bearers.

Individuals merely manage or control these assets and resources on behalf of the organisation.

In the event of a split, the Election Commission has the authority only to determine ownership of the party’s name and symbol. Judicial precedent has made it clear that ownership or distribution of a party’s assets must be decided through a civil suit.

This process usually takes years of litigation. Until then, those authorised to operate a party’s accounts can continue to do so, making any potential freeze on funds significant, as it could leave the TMC financially crippled.

What Happens to Donations if a Party’s Accounts Are Frozen?

A political party can continue to receive donations even if its accounts are frozen, but it cannot withdraw or utilise those funds for expenditure.

Incoming donations are received by the bank but remain locked in the frozen accounts.

The funds would remain inaccessible until the accounts are unfrozen, which would only happen once the dispute that led to the freeze is resolved.

In practical terms, if the TMC’s accounts are frozen, it would halt or at least significantly reduce donations, as potential donors would know that the party cannot utilise those funds.

Moreover, a freeze on the political outfit’s bank accounts would signal a complete loss of control by the party leadership, potentially discouraging future donors.