S.C. Gupte, J.

The Petitioners, who are members and shareholders of the First Respondent Bank, have challenged the order passed by Reserve Bank of India and confirmed in appeal by the Appellate Authority, Department of Economic Affairs, cancelling the banking licence of the First Respondent Bank, in this writ petition.

2. The First Respondent is established as a co-operative bank under the provisions of the Maharashtra Co-operative Societies Act (“MCS Act”). It held a banking licence issued by Reserve Bank of India. The Managing Committee of the First Respondent committed various irregularities. The Registrar of Co-operative Societies initiated action under Section 88 of the MSC Act against the Managing Committee members of the First Respondent for the loss caused to the bank due to their negligence and sanctioning of bogus loans. F.I.Rs. were registered against the Managing Committee members under various provisions of the Indian Penal Code and Prevention of Corruption Act. In these circumstances, the Reserve Bank of India issued an order under Section 35-A of the Banking Regulation Act (“BR Act”) imposing financial restrictions on the First Respondent for a period of six m