A MOONEY 20R ON TKOF CLB WAS UNABLE TO RETRACT THE LNDG GEAR. HAD UNSAFE LIGHTS AND GEAR BYPASS LIGHTS. CHKLIST DISCOVERED EMER GEAR HANDLE WAS UNLATCHED. HANDLE RESET AND GEAR OP NORMAL.

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ACFT DEPARTED RWY 24 AT ZZZ; AND AT 75-100 FT AGL IT WAS FOUND THAT THE LNDG GEAR WOULD NOT RETRACT. GEAR UNSAFE INDICATIONS AND GEAR BYPASS LIGHTS ILLUMINATED ANY TIME THE HANDLE WAS IN THE UP POS. MOONEY'S CHKLIST WAS USED; AND IT WAS FOUND THAT THE EMER GEAR HANDLE WAS UNLATCHED. HANDLE WAS SECURED CIRCUIT BREAKERS WERE RESET AND GEAR FUNCTIONED NORMALLY. DESIGN OF THE HANDLE SECURING MECHANISM IS SUCH THAT VIBRATION OR PAX CAN UNLATCH IT INADVERTENTLY. PLT CALLED ATC FOR A NON EMER RETURN TO THE FIELD; AND CONDUCTED A VISUAL APCH. HOWEVER; ATC DISPATCHED RESCUE AND FIRE FIGHTING EQUIP; AND CALLED THE FAA. GEAR WAS INSPECTED BY PLT; AND MAINT PERSONNEL WERE CONTACTED VIA PHONE. THE ACFT POH AND MAINT PERSONNEL INDICATED THAT THERE WAS NO AIRWORTHINESS ISSUE IF EMER HANDLE WAS RE-LATCHED AND GEAR FUNCTIONED NORMALLY. FAA PERSONNEL WERE DISPATCHED TO THE ARPT; HOWEVER; PLT HAD LEFT BY THE TIME THEY ARRIVED. FAA INSPECTORS ASSUMED ACFT HAD A SERIOUS MALFUNCTION AND WAS BEING OPERATED CONTRARY TO THE FAR'S. PROB WAS CAUSED BY A POOR ACFT DESIGN WITH RESPECT TO THE HANDLE AND IT'S DIFFICULT TO SEE LOCATION BEHIND THE PLT'S SEAT. OVERREACTION BY ATC AFTER THEY WERE TOLD NO EMER EXISTED AND THE NOTIFICATION OF THE FAA COMPOUNDED THE PROB. FAA IS REVIEWING INCIDENT. ACFT WAS FLOWN TO ZZZ1 THAT DAY FOR COSMETIC WARRANTY WORK. GEAR SYS WAS CHKED AND NO ISSUES WERE FOUND.