PMLA attachment cannot override State depositor-protection regime for the same properties, but survives for non-overlapping assets.

Where a special State statute creates a self-contained scheme for attachment, administration and equitable distribution of attached properties to depositors, provisional attachment under the Prevention of Money Laundering Act cannot displace that regime for the same properties. The Court held that overlapping PMLA attachment could not prevail over properties already attached and administered under the Andhra Pradesh Protection of Depositors of Financial Establishments Act. At the same time, PMLA attachment was sustained for properties not covered by the predicate-offence attachment, and the Enforcement Directorate could continue before the Special Court in relation to surplus sale proceeds and other non-overlapping assets.

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Issues: (i) Whether the properties already attached and administered under the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 could be subjected to provisional attachment under the Prevention of Money Laundering Act, 2002. (ii) Whether the provisional attachment orders under the Prevention of Money Laundering Act, 2002 could stand in respect of properties not covered by the predicate-offence attachment.

Issue (i): Whether the properties already attached and administered under the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 could be subjected to provisional attachment under the Prevention of Money Laundering Act, 2002.

Analysis: The State enactment was held to contain a specific mechanism for attachment, administration of attached property, and equitable distribution of sale proceeds among depositors through the Special Court. The Prevention of Money Laundering Act, 2002 was recognised as a later central enactment with an overriding clause, but it was found not to contain any corresponding provision for equitable distribution to depositors comparable to the State Act. The Court held that, on the facts, continuance of the State Act proceedings would better serve the interests of the depositors and that the PMLA attachment could not be allowed to frustrate that statutory object in relation to properties already under the State attachment regime.

Conclusion: The provisional attachment under the Prevention of Money Laundering Act, 2002 could not prevail over the attachment and administration already in place under the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 for the same properties.

Issue (ii): Whether the provisional attachment orders under the Prevention of Money Laundering Act, 2002 could stand in respect of properties not covered by the predicate-offence attachment.

Analysis: The Court distinguished between properties covered by the State authorities' predicate-offence attachment and properties outside that attachment. It held that the Enforcement Directorate was entitled to proceed under the Prevention of Money Laundering Act, 2002 in respect of properties not covered by the earlier predicate-offence attachment, and that its participation before the Special Court could continue for dealing with surplus sale proceeds in accordance with law. The challenge was therefore accepted only to the extent of overlap with the predicate-offence attachments.

Conclusion: The provisional attachment orders were sustained in respect of properties not covered by the predicate-offence attachment and were set aside only to the extent they related to properties already attached in the predicate-offence proceedings.

Final Conclusion: The writ petitions were disposed of by granting partial relief: the overlapping PMLA attachments were quashed, the non-overlapping attachments were preserved, and the parties were left to pursue the remaining issues before the Special Court under the State enactment.

Ratio Decidendi: Where a special State statute provides a self-contained mechanism for attachment, administration, and equitable distribution of attached properties to depositors, a later PMLA attachment cannot displace that regime for the same properties, though the PMLA may still operate on properties not already covered by the predicate-offence attachment.

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