Alternative security may replace attached property when procedural powers permit substitution and urgent attachment conditions are not met.

The Appellate Tribunal held that, where the statute does not prohibit substitution, it may regulate its own procedure and accept alternative property in place of a provisionally attached asset if the substitute is unencumbered and adequate security. It also treated the statutory conditions for urgent provisional attachment under the Prevention of Money-laundering Act, 2002 as mandatory, and found the attachment vulnerable because the required recorded reasons were not produced and the necessity for immediate attachment was not satisfactorily shown. The interim applications were allowed, release of the attached property was directed, and the alternative land was accepted pending final decision in the appeal.

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Issues: Whether the Appellate Tribunal could, in exercise of its procedural powers, permit substitution of the provisionally attached property with alternative security and direct release of the attached property; and whether the provisional attachment could be sustained when the statutory preconditions for invoking the urgent attachment power were not shown to exist.

Issue: Whether the Appellate Tribunal could, in exercise of its procedural powers, permit substitution of the provisionally attached property with alternative security and direct release of the attached property.

Analysis: The Tribunal held that the Appellate Tribunal is not bound by the Code of Civil Procedure and may regulate its own procedure under Section 35(1) of the Prevention of Money-laundering Act, 2002. It also noted that the Act contains no express bar against substituting attached property, and that such incidental power could be exercised where the circumstances justified it. The alternative property offered was stated to be free from encumbrance and of sufficient value to secure the claim.

Conclusion: The Tribunal held that it had the power to accept the alternative property and permit substitution of the attached asset.

Issue: Whether the provisional attachment could be sustained when the statutory preconditions for invoking the urgent attachment power were not shown to exist.

Analysis: The Tribunal examined Section 5(1) of the Prevention of Money-laundering Act, 2002 and treated the first proviso and the urgent second proviso as mandatory conditions. It found that, on the material before it, the property was under construction, third-party homebuyers and secured creditors were involved, and there was no satisfactory showing that non-attachment would frustrate proceedings. It also noted that the required recorded reasons were not produced before it. On that basis, the attachment was found vulnerable at least prima facie.

Conclusion: The Tribunal held that the attachment could not be sustained in the manner in which it had been made and directed release of the attached property against acceptance of the alternative land.

Final Conclusion: The interim applications were allowed, the attached property was directed to be released, and the alternative property offered by the appellant was directed to be accepted pending final decision in the appeal.

Ratio Decidendi: Where the statute does not prohibit substitution, the Appellate Tribunal may, in aid of its procedural powers and to secure justice, accept alternative property in place of an attached asset; the urgent attachment power under Section 5(1) of the Prevention of Money-laundering Act, 2002 must be supported by recorded reasons and strict compliance with its mandatory preconditions.

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