Post-attachment tenancy cannot defeat possession under PMLA; Rule 5(3) protects only pre-existing tenants in possession.

A tenancy created after a provisional attachment under the Prevention of Money-Laundering Act could not defeat the authorised officer's power to take possession after confirmation of attachment. Rule 5(3) protected only a tenant already in possession before the provisional attachment, enabling rent to be paid to the Directorate instead of possession being taken. Where the lease deed was executed after the attachment order, and the alleged oral tenancy was unsupported in law because the lease was compulsorily registrable, no enforceable tenancy rights arose against the attachment process. The post-attachment tenancy was therefore ineffective, and Rule 5(3) did not apply.

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Issues: Whether a tenancy created after a provisional attachment order under the Prevention of Money-Laundering Act, 2002 could defeat the authorised officer's power to take possession of the attached property, and whether Rule 5(3) of the 2013 Rules protected such a tenant.

Analysis: The provisional attachment order had been passed before the lease deed was executed and before possession was taken over pursuant to confirmation of the attachment. The scheme of the Act permits attachment and, after confirmation, taking over possession of the property so that it is not transferred, parted with, or dealt with during proceedings. Rule 5(3) protects only a tenant already in possession prior to the provisional attachment, in which case the authorised officer may direct payment of rent to the Directorate instead of taking possession. A tenancy created after the attachment cannot be used to defeat the statutory process, and an alleged oral tenancy of this nature could not confer enforceable rights where the lease was compulsorily registrable. The court also treated the post-order creation of tenancy rights as ineffective against the attachment process.

Conclusion: Rule 5(3) did not protect the petitioner or the tenant, and the authorised officer was entitled to take possession after confirmation of attachment.

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