JUDGMENT : (PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI) [1] The present Letters Patent Appeal under Clause 15 of the Letters Patent is filed by the appellants – original petitioners assailing the correctness and validity of the judgment and order dated 12.09.2024 passed by the learned Single Judge in Special Civil Application No.12142 of 2024. [2] The prayers made by the appellants - original petitioners in the writ petition before the learned Single Judge was to declare that respondent No.2 has not been eligible to act as an Arbitrator under Section 84(5) of the Multi State Cooperative Societies Act, 2002 (hereinafter referred as to "the Act, 2002") and Section 12 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as to "the Act, 1996"). It was also prayed by the petitioners to set aside the order dated 01.08.2024 passed by the respondent No.2. [3] Learned Single Judge after considering the averments as well as the contentions raised by both the sides was pleased to dismiss the writ petition by impugned order dated 12.09.2024 observing that no interference was required in order dated 01.08.2024 passed by the respondent No.2. However, liberty was reserved in favour of the original petitioners to avail appropriate remedy in accordance with law. It is this order dated 12.09.2024 passed by learned Single Judge, which is impugned in the present Letters Patent Appeal. [4] The factual matrix which has led to filing of the writ petition is that petitioner No.1 is a company dealing in steam coal in bulk of Indonesia origin. Respondent No.1 (hereinafter referred to as "the respondent") is a Multi State Cooperative Bank and respondent No.2 is the Arbitrator appointed by the respondent No.3 at the instance of respondent No.1 purportedly under Section 84 of the Act, 2002. Petitioner had availed several financial assistance from the respondent from 2018 to 2023. Respondent had sanctioned Rs.6,400/- lakhs financial assistance in favour of the petitioner vide letter dated 13.10.2023. Such financial assistance was against the securities of equitable mortgage. Subsequently, the petitioner for the purpose of importing coal had requested to the respondent for buyers credit under bill of landing for various dates. [4.1] It was the case of the petitioner that the respondent had wrongly treated the expiry of credit of 120 days and had appropriated the fixed deposit given by the petitioner which was to the tune of Rs.10,63,67,737/- as margin amount. [4.1] It was the case of the petitioner that the respondent had wrongly treated the expiry of credit of 120 days and had appropriated the fixed deposit given by the petitioner which was to the tune of Rs.10,63,67,737/- as margin amount. It was the case of the petitioner that he had deposited the amount from time to time, however, the respondent had demanded of Rs.7,65,93,186.20/-. According to the respondent, the petitioner was a defaulter. [4.2] In wake of dispute between the parties, the respondent filed Arbitration Case No.27 of 2024 before respondent No.2 who was appointed as an Arbitrator under Section 84 of the Act, 2002. It was the case of the petitioner that the arbitration case was filed without any notice being provided. It is the case of the petitioner that respondent No.2 passed order under Section 17 of the Act, 1996 granting interim relief to the petitioner which resulted into freezing of 17 bank accounts of the petitioners who were the borrowers as well as guarantors. Pursuant to the order passed by the respondent No.2, the petitioner preferred writ petition being Special Civil Application No.12142 of 2024 which came to be dismissed by the learned Single Judge by way of order dated 12.09.2024 which is now impugned in the present Letters Patent Appeal. [5] Heard Mr. Manish R. Bhatt, learned senior advocate assisted by Mr. Yuvraj G. Thakore, learned advocate appearing for the appellants and Mr. Saurabh N. Soparkar, learned senior advocate assisted by Mr. J.B.Dastoor, learned advocate appearing for the respondent. [6] Mr. Manish R. Bhatt, learned senior advocate for the appellants has submitted that the respondent No.2 is appointed in violations of Clause No.22 of Schedule V of the Act, 1996 which is applicable to the Act, 2002 under Section 84(5). It was submitted by Mr. Bhatt, learned senior advocate that respondent No.2 had not disclosed as to how many arbitration are conducted by him nor which has presently going on. The appellants are neither served with the copy of the claim statements and document annexed therewith, therefore, the impugned order is biased, arbitrary and unsustainable in the eyes of law and is required to be quashed and set aside. The appellants are neither served with the copy of the claim statements and document annexed therewith, therefore, the impugned order is biased, arbitrary and unsustainable in the eyes of law and is required to be quashed and set aside. It was further submitted that the impugned order was passed with the bias mind and the arbitrator, namely, respondent No.2 has not taken note of the fact that the property mortgaged by the appellants would cover the entire outstanding amount of the appellants, and therefore, such drastic order as an interim measure which would ruin the image of the appellants, was not called for. [6.1] It was vehemently submitted by Mr. Bhatt, learned senior advocate that he is aware about the fact that the alternative remedy lies under Section 37 of the Act, 1996 against the order dated 01.08.2024 passed by respondent No.2, but it is the biased approach of respondent No.2 which has lead to the filing of the writ petition. It was further contended that the respondent No.2 has been appointed by the State Registrar of Cooperative Societies under the provisions of the Act, 2002 and all the arbitration of the respondent are conducted by only one Arbitrator, i.e. respondent No.2, and most of the decisions go in favour of the respondent bank. This fact itself prove that the decisions of respondent No.2 are not impartial. The process of appointment itself is a reflection of malice in law, inasmuch as, the statutory arbitrator cannot be expected to be impartial when he is appointed to deal with all the matters of the bank and sits in an office inside the premises of the bank. [7] Per contra, Mr. Saurabh N. Soparkar, learned senior advocate appearing for the respondent would submit that the provisions of the Arbitration Act, 1996 enables the appellants to raise an issue of bias before the learned Arbitrator himself. The appellants having not raised such an issue before the Arbitrator cannot be permitted to raise the said issue before this Court particularly when the arbitration proceedings are pending at present before the learned Arbitrator. It was further contended that the respondent bank has not made the appointment of the learned Arbitrator. Placing reliance on page 184', the reply filed by the respondent bank, it was contended by Mr. It was further contended that the respondent bank has not made the appointment of the learned Arbitrator. Placing reliance on page 184', the reply filed by the respondent bank, it was contended by Mr. Soparkar, learned senior advocate that the Registrar of Cooperative Societies, Gujarat State, Gandhinagar has appointed the Arbitrator under the provisions of the Multi State Cooperative Societies Act, 2002. The State Registrar under the delegated power of the Central Registrar appoints Arbitrator under Section 84(5) of the Act, 2002 for each bank for resolving all its disputes arising between its members and the bank, and therefore, the appointment of respondent No.2 Arbitrator cannot be challenged being in violation of Clause No.22 of the Schedule V of the Arbitration Act, 1996. It was also submitted by Mr. Soparkar, learned senior advocate that there is an alternative remedy of preferring an appeal under Section 37 of the Act, 1996 which has not been availed by the petitioner. [8] Having heard learned counsels appearing for the respective parties and perused the material on record, it may be noted that the first and foremost objection taken by the learned advocate for the appellants is with regard to the breach of Section 21 of the Act. The basic foundation of the contention made by the appellants is fallacious, inasmuch as, the arbitration proceedings under consideration is not a commercial arbitration but a statutory arbitration. The Arbitrator herein has been appointed pursuant to the provisions of Section 84(5) of the Multi State Act, 2002 by the State Registrar on delegation of its powers by the Central Registrar. [9] The arbitration proceedings herein have been conducted in accordance with the provisions of Section 84 of the Multi-State Cooperative Societies Act, 2002. Section 84 (1) provides for the reference of the dispute under the Act to the Arbitrator, which may arise with respect to any of the matters touching the constitution, management or business of the Multi-State Cooperative Society, among or between the persons covered by Clauses (a) to (d) as contained in sub-section (1) of Section 84. Sub-section (4) of Section 84 provides that the dispute referred to arbitration under sub-section (1) shall be settled or decided by the Arbitrator to be appointed by the Central Registry. The appointment of arbitrator for settlement of dispute under the Multi-State Cooperative Societies Act, 2002, thus, is governed by subsection (4) of Section 84. Sub-section (4) of Section 84 provides that the dispute referred to arbitration under sub-section (1) shall be settled or decided by the Arbitrator to be appointed by the Central Registry. The appointment of arbitrator for settlement of dispute under the Multi-State Cooperative Societies Act, 2002, thus, is governed by subsection (4) of Section 84. There is no dispute about the fact that the learned Arbitrator herein had been appointed by the State Registry on the delegation of power in accordance with law by the Central Registry. No issue could be raised about the exercise of power of delegation by the Central Registry. [10] With regard to the issue about the applicability of the provisions of Section 21 of the Arbitration and Conciliation Act, 1996, which contemplates the date of commencement of arbitral proceedings, we may take note of Section 2 (4) of the Arbitration and Conciliation Act, 1996, which reads as under: “Section 2(4): This part except sub-section (1) of section 40, sections 41 to 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.” [11] A perusal of the provision of sub-section (4) of Section 2 indicates that in a case of statutory arbitration, the initiation of arbitration at the pre-referral stage, as contemplated under the arbitration agreement, is by way of the enactment itself. The language employed in subsection (4) of Section 2 makes it clear that the provision contained in the enactment for reference of the dispute to arbitration would be treated as the arbitration agreement for the purposes of Part-I of the Arbitration Act, 1996, which deals with the arbitration "whether or not be administered by permanent arbitral institution", within the meaning of Section 2 (a) of the Arbitration Act, 1996. The result is that at the stage of making reference of dispute to the Arbitrator, i.e. for appointment of arbitrator as contained in Chapter ‘III’ and the conduct of arbitral proceedings as contemplated in Chapter ‘IV’ of Part-I, stands substituted by the enactment providing for referring the dispute to arbitration and appointment of arbitrator, itself. The result is that at the stage of making reference of dispute to the Arbitrator, i.e. for appointment of arbitrator as contained in Chapter ‘III’ and the conduct of arbitral proceedings as contemplated in Chapter ‘IV’ of Part-I, stands substituted by the enactment providing for referring the dispute to arbitration and appointment of arbitrator, itself. [12] Insofar as Section 21 of the Arbitration Act, 1996 is concerned, the same lays down the manner in which the arbitral proceedings would commence on a dispute between the parties arising out of the arbitral agreement. The said section contemplated making of a request to the other party to the arbitral agreement to refer a particular dispute to arbitration and provides that the date on which such a request is made, the arbitral proceedings in respect of a particular dispute would be treated as commenced. In the case of statutory arbitration, where the proceedings at the pre-reference stage, i.e. reference of dispute to arbitration and the appointment of arbitrator is governed by the statutory provision and the statute itself is treated as an arbitration agreement by virtue of sub-section (4) of Section 2, the plea of the compliance of the procedure for appointment of arbitrator as contained in Section 21 of the Arbitration Act, 1996, is found misconceived. [13] No inconsistency has been shown with the statutory enactment and the provisions contained in Part-I of the Arbitration Act, 1996. The arguments canvassed by the learned advocate for the appellants about the applicability of the provisions of Section 21 in a case of statutory arbitration, thus, is found absolutely meritless. [14] Further, it is not in dispute that in the loan agreement, the appellants have agreed for appointment of an Arbitrator and referring to any dispute to arbitration under the provisions of Multi State Act, 2002. It is also not in dispute that the appellant is a defaulter and once he has taken the facilities as per the loan agreement which specifically refers to the dispute being conducted by an Arbitrator as appointed under Section 84(5) of the Multi State Act, 2002, he cannot turn around to challenge the procedure for appointment of Arbitrator. [15] The arguments as to the independence and impartiality of the statutory arbitrator solely on the ground that he is doing the cases of the bank for a long time are baseless and are liable to rejected being wholly misconceived. [15] The arguments as to the independence and impartiality of the statutory arbitrator solely on the ground that he is doing the cases of the bank for a long time are baseless and are liable to rejected being wholly misconceived. Moreover, the arbitrator is a Judicial officer and has been appointed in accordance with the statute. No exception can be taken to his independence at all. [16] Apart from the fact that this being a statutory arbitration, another important point for consideration is that the appellants have not raised this issue at all before the learned Arbitrator. That being the position, we accept the contention raised by Mr. Soparkar, learned senior advocate that the appellants, having not raised this issue before the learned Arbitrator, would not be entitled to raise such issue before this Court when the arbitration itself is going on. Apart from that, there is always an alternative remedy available with the appellants under Section 37 of the Act, 1996. All these aspects, coupled with the fact that the Arbitrator has been appointed by the State Registrar under the delegated power of the Central Registrar for resolving the disputes as per the provisions of Section 84(5) of the Act, 2002, we see no reason to interfere with the order passed by the learned Single Judge in the matter. [17] In view thereof, the instant appeal is devoid of merit and hence, dismissed. [18] In view of the order passed in the main matter, connected Civil Application stands disposed of.