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2010 (10) TMI 84 - HC - FEMAWhether once an Authorised Dealer duly complies with the instructions laid down in the Memorandum of instructions to Full Fledge Money Changer (FFMC), issued by Reserve Bank of India (RBI) under section 73(3) of FERA, while undertaking money changing transactions with another Authorised Dealer, can such Authorised Dealer then be held liable for violation of provisions of section 6(4) and (5) of FERA? Held that:- The submission of the learned counsel for the Appellants based on para 9 of the FLM, in our view, is misconceived, though para 9 permits free transaction between two money-changers, the said transaction cannot be carried out in violation of the provisions of FERA but has to keep within the parameters of FERA. Relying upon para 9 of the FLM, a money changer cannot absolve himself or itself of the obligation cast by section 6(4) and 6(5) of FERA. In fact para 9 of the FLM is circumscribed by the provisions of the Act namely section 6(4) and 6(5) as also para 3 of the FLM. The submission of the learned counsel for the Appellants that there was no obligation on the Appellants to check the credentials of the representative of the Hotel Zam Zam in terms of section 6(5) in view of para 9 of the FLM does not commend to us and has to be rejected. Thus we do not find any infirmity or illegality in the order passed by the ATFFE confirming the Order in Original. Resultantly, the question of law would have to be answered in favour of the revenue and against the appellants.
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