Secured creditor rights under PMLA attachment must be pursued through section 8(8) rather than seeking direct release.

Attachment of property under the Prevention of Money Laundering Act, 2002 does not by itself extinguish a mortgagee's or secured creditor's interest, but such a claimant cannot obtain release of the attached property merely on the basis of a prior mortgage or charge. The Tribunal applied its earlier ruling and held that the financial institution's rights must be worked out through the statutory mechanism under section 8(8). The secured creditor was therefore declined relief in the appeal, and its remedy was left to be pursued before the Special Court under section 8(8).

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Issues: Whether the appellant bank, as a mortgagee and asserted bona fide secured creditor, was entitled to release of the attached properties or to enforce its claim notwithstanding attachment under the Prevention of Money Laundering Act, 2002.

Analysis: The attached properties were already mortgaged with the appellant bank, but the Tribunal held that the question was covered by its earlier decision in JM Financial Asset Reconstruction Company Ltd. The governing principle applied was that attachment under the Prevention of Money Laundering Act, 2002 does not extinguish a claimant's interest, but the claim of a financial institution over attached property is to be worked out in accordance with the statutory mechanism under section 8(8). The Tribunal therefore declined to interfere with the attachment order at the instance of the secured creditor and noted that the appellant could pursue its claim before the Special Court under section 8(8).

Conclusion: The appellant bank was not entitled to release of the attached properties in this appeal, and its remedy lay in pursuing an appropriate claim under section 8(8) of the Prevention of Money Laundering Act, 2002.

Ratio Decidendi: A mortgagee or secured creditor claiming a bona fide interest in property attached under the Prevention of Money Laundering Act, 2002 cannot secure release of the property in appeal merely on the basis of prior mortgage or charge, and must work out its rights through the statutory procedure under section 8(8).

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