Raipur/New Delhi, Sep 11 (IANS): Civil rights activists Sunday demanded the early release of a Chhattisgarh resident arrested on suspicion that he was a Maoist sympathiser and was allegedly involved in an illegal money transfer by the Essar group for leftist insurgents - a claim strongly denied by his supporters.

Journalist-activist Lingaram Kodopi was arrested Friday along with contractor B.K. Lala following recent WikiLeaks revelations that Essar was paying "protection money" to Maoists in Chhattisgarh.

The two have been named in the case under under various sections of the Indian Penal Code (IPC) besides clauses of a stringent Chhattisgarh Special Public Security Act, which rights activists have termed a "draconian law", framed to tackle Maoist sympathizers.

"The charges against Essar are of extremely serious nature. For long, police had inputs that money was regularly going to Maoists. Now we have made some breakthrough with arrest of two people," a police officer said.

Police say Lala withdrew Rs.15 lakh from his State Bank of India account from Kirandul in Dantewada and was set to hand over the money on behalf of Essar at the Palanar weekly market to Maoists.

Police say Essar has business operations in Dantewada.

"Lala admitted to be carrying money on behalf of Essar while Kodopi was tipped to receive the money on behalf of Maoists," Dantewada Superintendent of Police Ankit Garg told IANS.

Essar officials refused to comment on the issue when contacted by IANS.

However, human rights bodies termed Kodopi's arrest as illegal and said he was being framed in the case.

People's Union for Democratic Rights, Delhi (PUDR), condemned the arrest "in the strongest terms" and alleged that the police team continues to be present in Kodopi's Sameli village in Dantewada district.

"There is fear that police intends to arrest his aunt Soni Sori too," a PUDR press statement said.

The statement said the arrest "comes immediately on the heels of the Chhattisgarh government's attempt to undermine the Supreme Court order disbanding the practice of exploiting (Special Police Officer's) SPOs to fight the Maoists".

"The arrest of Lingaram is an attempt by the Chhattisgarh police to declare their total contempt for the Constitution of India and the established law of the land," it said.

Kodopi, who recently completed his journalism studies from an institution in Noida, was earlier arrested for his alleged Maoist links.

He was picked up from his village in September 2009 and kept in detention for 40 days. He was released after a court intervention.

In April 2010, he appeared before the Indian Peoples Tribunal at Delhi on the alleged atrocities being conducted by the anti-Maoist militia Salwa Judum and the security forces.

In July that year, Chhattisgarh police in Dantewada alleged that he was the "prime suspect" for the attack on the house of Congress worker and civil contractor Avdesh Singh Gautam. However, the link to the attack was never established.