ORAL ORDER

(PER : HONOURABLE MR. JUSTICE A.J.DESAI)

1. By way of present Letters Patent Appeal under Clause- 15 of the Letters Patent, present appellant-original respondent no.3 in the captioned writ petition, has challenged the oral judgment and order dated 21/09/2021 passed by learned Single Judge by which the learned Single Judge accepted the petition filed by Mehsana Urban Cooperative Bank Ltd. setting aside the order dated 28/04/2021 passed by respondent no.2 of the petition i.e. the Central Registrar of Cooperation Societies (Ministry of Agriculture and Farmers Welfare Department of Agriculture, Cooperation and Farmers Welfare), New Delhi, by which while dealing with a show cause notice issued by him against the bank under Section 78 of the Multi-State Cooperative Societies Act, 2002 (hereinafter referred as “MSCS Act, 2002”)., appointed an Arbitrator as provided under Section 84 of the aforesaid act (MSCS Act, 2002) in connection with the so-called irregularities committed by the Chairman and Chief Executive Officer of the Cooperative Bank.

2. Short facts arising out of the case are that the present appellant who is a member of the Mehsana Urban Cooperative Bank has filed a complaint to the Central Registrar of Cooperation Societies, New Delhi about alleged illegality committed by the Chairman and Chief Executive Officer of the Bank. The Central Registrar issued a show cause notice dated 19/11/2019 under Section 78 of the MSCS Act, 2002 and called upon as to why inquiry should not be ordered under Section 78 of the Act. After examining the complaint, report received from the Reserve Bank of India and considering the reply filed on behalf of CEO as well as detailed reply through an advocate dated 02/03/2020 on behalf of the Bank, the Registrar passed an order dated 28/04/2021 (impugned in the petition) and ultimately passed following orders:

“10. This authority has taken cognizance of the submissions made before it. Prima facie, there are facts placed by the parties which need proper adjudication by placing them before an arbitrator u/s 84 of the MSCS Act, 2002. The following issued need to be adjudicated upon:

1. Whether the appointment of Chief Executive Officer (CEO), Shri Vinodbhai Patel after superannuation is in violation of the rules as laid down in the bye-laws of the bank.

2. Whether any loans have been extended which are violative of the provisions of section 29 and 43 of the MSCS Act, 2002 or any of the provision of MSCS Rules 2002 & the guidelines of RBI.

3. Whether the directors who have been re- elected in the board including the Chairman of the bank mentioned in the RBI’s report dated 06.12.2018 were eligible to contest in the election held in September 2019.

4. Whether the election process was in consonance with the provisions of MSCS Act, 2002 and rules made thereunder.

11. In view the above and in exercise of power conferred under section 84 of the MSCS Act, 2002, this authority appoints Shri Vipul Ganda Advocate as an Arbitrator to arbitrate upon the after mentioned issued within 90 days of this order and submit a report to this office. The procedure as laid down under The Arbitration and Conciliation Act, 1996 shall be applicable to the proceedings.”

3. The aforesaid order was challenged on various grounds including the powers of Registrar under Section 78 and passing the order under Section 84 of the Act. None of the respondents including present appellant filed any affidavit-in- reply in the matter and had agreed for final hearing of the matters as observed by the learned Single Judge in para-3 of the impugned judgment. The learned Single Judge after considering the factual as well as legal aspects, accepted the petition and quashed the impugned judgment by which certain directions came to be issued.

4. Hence, this appeal.

5. Mr. Tirthraj Pandya, learned advocate for the appellant vehemently submitted that learned Single Judge has committed certain factual errors in deciding the matter. He would submit that th