Jharkhand's Claim Over BISCOMAUN Board Seat is a State vs. State Dispute for Supreme Court Under Article 131: Jharkhand High Court - 2025-07-01

Court Orders & Legal Analysis.

Jharkhand 's Claim for BISCOMAUN Board Seat Falls Under Supreme Court's Exclusive Jurisdiction, Rules High Court

Ranchi, Jharkhand – The Jharkhand High Court, in a significant ruling on constitutional jurisdiction, has held that the dispute between Jharkhand and Bihar over the right to nominate a director to the board of the Bihar State Cooperative Marketing Union Limited (BISCOMAUN) falls exclusively within the purview of the Supreme Court under Article 131 of the Constitution.

A division bench of Justice Rongon Mukhopadhyay and Justice Ambuj Nath , while disposing of a writ petition filed by the State of Jharkhand , clarified that when a dispute involves a question of legal right between two states, the appropriate and exclusive forum for adjudication is the nation's apex court.

---

Background of the Dispute

The case originated from the State of Jharkhand 's claim to a seat on the Board of Directors of BISCOMAUN, a multi-state cooperative society with operations in both Jharkhand and Bihar since the state's bifurcation in 2000. Jharkhand had nominated an officer to the board, citing its inherited equity share capital and a specific provision (Clause 27) in BISCOMAUN's bye-laws that provides for a nominee from Jharkhand .

Initially, the Cooperative Election Authority accepted this nomination, and the nominee's name was included in the voter list for the board's office-bearer elections. However, the State of Bihar subsequently issued a notification on April 3, 2025, asserting that it held 99.26% of the share capital and that Jharkhand held none. This led to a decision on May 5, 2025, which effectively barred Jharkhand 's nominee from the board, prompting Jharkhand to file a writ petition in the High Court.

---

Arguments Before the Court

Petitioner (State of Jharkhand ): - Advocate General Rajiv Ranjan argued that Jharkhand has a vested right to nominate a director under Section 48 of the Multi-State Cooperative Societies Act, 2002, based on its inherited equity share. - He contended that the decision to exclude their nominee was made in violation of the principles of natural justice, as no proper notice was served on Jharkhand . - He further argued that the High Court had territorial jurisdiction as part of the cause of action arose in Jharkhand , where 82 cooperative societies affiliated with BISCOMAUN are located.

Respondents (State of Bihar, Union of India, and others): - Senior Advocates Ajit KumarSinha and Ajit Kumar , representing the respondents, raised preliminary objections to the petition's maintainability. - Their primary contention was that the High Court lacked jurisdiction. They argued that the matter was either an election dispute referable to arbitration under Section 84 of the 2002 Act or, more significantly, a dispute between two states over a legal right, which exclusively falls under the Supreme Court's original jurisdiction as per Article 131 of the Constitution. - They also pointed out that the bye-law clause relied upon by Jharkhand had not been approved by the Central Registrar, rendering it invalid.

---

High Court's Jurisdictional Analysis

The High Court meticulously examined the jurisdictional arguments, particularly the applicability of Article 131. The bench distinguished the case from ordinary disputes and internal cooperative society matters.

The court systematically dismissed the respondents' other jurisdictional challenges: - It held that Section 84 (Arbitration) was not applicable as the dispute was not an internal matter of the society but a larger conflict between two states. - It also found that Section 103(4) of the Act, which refers to the "appropriate High Court" in Patna, was limited to a specific procedural context and could not be used to oust the Jharkhand High Court's jurisdiction in a broader sense.

However, the court found merit in the argument concerning Article 131. The judgment observed:

"The entire spectrum of the case involves a dispute which transcends into the realm of a legal right concomitant with the dispute between the State of Jharkhand and the State of Bihar over the equity share in the Multi State Cooperative Society and the resultant representative of the State of Jharkhand by nominating a member in the Board of Directors and such question has to be adjudicated upon by invoking Article 131 of the Constitution of India."

Relying on landmark Supreme Court precedents like Tashi Delek Gaming Solutions Ltd. v. State of Karnataka and State of Jharkhand v. State of Bihar , the bench concluded that Article 131 is attracted when a dispute between states involves a question of law or fact on which the existence or extent of a legal right depends.

---

Final Decision and Implications

Concluding that the dispute was not amenable to its jurisdiction under Article 226 of the Constitution, the High Court disposed of the writ petition. It granted liberty to the State of Jharkhand to approach the "appropriate forum," clearly indicating the Supreme Court under its original jurisdiction.

The court clarified that its decision removes any impediment to the continuation of the BISCOMAUN election process. This judgment serves as a crucial reminder of the constitutional scheme that designates the Supreme Court as the sole arbiter for legal disputes between states, ensuring that such high-stakes federal conflicts are resolved at the highest judicial level.