Natural justice in provisional attachment: assignee creditor must be heard before confirmation under money-laundering procedure.

An assignee secured creditor whose interest in mortgaged property was brought to the Adjudicating Authority's notice had to be heard before confirmation of provisional attachment under PMLA. The authority was required to consider the substitution request, reply, and submissions; failure to deal with them amounted to breach of the statutory notice-and-hearing requirements under Section 8 and violation of natural justice. The impugned confirmation was therefore unsustainable against the assignee and the attached properties, and the matter had to be reconsidered after affording due opportunity, while the attachment continued pending fresh adjudication.

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Issues: Whether the impugned confirmation of provisional attachment was liable to be set aside for non-consideration of the appellant's substitution application and reply, amounting to violation of the statutory procedure and principles of natural justice.

Analysis: The appellant had stepped into the shoes of the original lender by assignment before the attachment proceedings progressed to confirmation. The record showed that the appellant's interest in the mortgaged properties was brought to the notice of the Adjudicating Authority, yet no effective order on substitution was passed and the appellant's reply, oral submissions, and written submissions were not dealt with in the impugned order. In these circumstances, the proceedings under the Prevention of Money Laundering Act required compliance with the notice and hearing requirements under Section 8, and the failure to consider the appellant's stand amounted to a procedural infirmity affecting the validity of the order qua the appellant and the attached properties.

Conclusion: The impugned order was not sustainable against the appellant and was required to be set aside with a direction for fresh adjudication after affording due opportunity.

Final Conclusion: The appeal succeeded, the attachment-related adjudication was sent back for reconsideration, and the appellant's claims were left open before the Adjudicating Authority while the existing attachment was directed to continue pending fresh decision.

Ratio Decidendi: Where an assignee secured creditor's interest in mortgaged property is brought on record or otherwise made known, the Adjudicating Authority must consider its substitution request and submissions before confirming attachment under the money-laundering law; failure to do so violates the statutory hearing requirement and natural justice.

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