The Bihar government’s appointment of three directors to the Board of Bihar State Cooperative Marketing Union Limited (BISCOMAUN), which serves both Bihar and Jharkhand, has sparked strong objections from the Jharkhand government.
The latter has cited violations of the Multi-State Cooperative Societies (MSCS) Act, 2002, and BISCOMAUN’s own by-laws.
In a formal letter to the Registrar of Cooperatives, New Delhi, the Jharkhand government demanded the immediate revocation of this notification, emphasizing that as a multi-state cooperative, the right to appoint directors lies solely with the central registrar.
In its notification appointing three directors, the Bihar government argues that since the majority of Biscomaun’s funds come from the state, it has the right to appoint three directors. The notification also references the relevant section of the MSCS Act to support its claim.
The notification reads : “Under Section 48 of the Multi-State Cooperative Societies Act, 2002, state or central governments can nominate directors to the board of a multi-state cooperative society. According to Section 48(1)(c) of the Act, if the government holds 51% or more of the equity share capital, three members can be nominated to the board, with their total number not exceeding one-third of the board’s total members.
Given that Bihar Government holds 99.26% of BISCOMAUN’s total share capital of Rs 19,76,19,837, three directors have been nominated for the board of Bihar State Cooperative Marketing Union Limited (BISCOMAUN) for its full term, as follows: Rakesh Kumar, Purnia, Manoj Kumar Singh, Siwan,Deepak Kumar, Patna.These directors will hold all the rights granted under the Act, by order of the Governor of Bihar.”
Meanwhile, Dr. Sunil Kumar Singh, the outgoing Chairman and a newly elected director argues that BISCOMAUN was registered as a “Deemed Multi-State Cooperative” following the bifurcation of Bihar and Jharkhand, and under the MSCS Act, only the central registrar has the authority to make such appointments.
Dr. Singh accused Bihar of using the appointments to bolster the ruling party’s influence on the BISCOMAUN board, arguing this move openly flouts the cooperative’s by-laws, which permit only one director each from Bihar and Jharkhand on the board.
Sunil fears that the Bihar government’s appointments are aimed at influencing the upcoming elections for the Chairman and Vice-Chairman positions at BISCOMAUN. Citing the MSCS Act, he pointed out that nominated directors are ineligible to vote in such elections, which adds to the suspicion of foul play.
NCCF Chairman Vishal Singh counters Sunil’s argument, stating that the actions taken by the Bihar government in this matter are fully within the purview of the MSCS Act. ‘Have you ever heard of a cooperative body running with government funds without any government nominee, as was the case with Biscomaun for a long time?’ he asked.
Vishal further stated that even when the government did not insist on appointing its nominees in the past, Biscomaun, as a leading cooperative body, should have exercised due diligence and requested the government to appoint nominees.
As this matter progresses, it is likely to remain a contentious issue between the two states, with legal and political implications for cooperative governance in the region.
