( 1 ) THE appellant preferred this criminal appeal aggrieved by the conviction and sentence imposed on him by the judgment dated 31-7-1998 in Calendar Case no. 6 of 1997 on the file of the Chif Judicial magistrate/additional Sessions Judge, adilabad. The charge-sheet was filed against the appellant-accused for the offences under sections 4 and 5 (i) (ii) and (iii) of Prize, chits and Money Circulation Schemes (Banning) act, 1978 (for short hereinafter referred to as the Act for the purpose of convenience) in Crime No. 52 of 1997 on the file of adilabad I Town Police Station.

( 2 ) IT is the case of the prosecution that the accused started money circulation scheme in the name of Indira Finance Enterprises in the premises bearing Door No. 4/3-135/3 near Anand Bhavan Lodge, adilabad. He enrolled 1500 members by taking deposit of Rs. 200/- per month. The period of scheme is 51/2 years. The accused also issued receipts specifying the above facts by showing the maturity date as 10-12-2001. Thus the accused contravened the provisions of the Act. It is also the case of the prosecution that on 16-3-1997 at about 4 p. m. PW-7 raided the premises of Indira Finance enterprises. Subsequently, the accused was apprehended in the same shop and that he confessed the offence. Lucky draw was proposed till the completion of the scheme. PW-1 being aggrieved of the cheating, appears to have reported the matter to police. But, however, as per record the crime was registered suo motu under Sections 4 and 5 of the Act and investigation was taken up. PW-1 to PW-7 were examined and exs. P1 to P8 and M. Os. 1 to 11 were marked. The learned Judge after recording findings ultimately found the accused guilty for the offence under Section 4 of the Act and sentenced him to undergo rigorous imprisonment for two years and to pay a fine of Rs. 1,000/- in default to undergo rigorous imprisonment for three months. But, however, found him not guilty for the offence under Section 5 of the Act.

( 3 ) SRI Nazeer Khan, learned counsel representing on behalf of the appellant had drawn the attention of this Court to Sections 3 and 4 of the Act and would contend that under Section 3 enrolling as a member or even participation are prohibited and Section 3 of the Act may have to be read along with Section 4, penal provision of the Act. In this view of the matter PW-1 s evidence, who is the only witness and who had supported the version of the prosecution, would be in the nature of the accomplice evidence and hence without proper corroboration it would be unsafe to rely upon the PW-1 s evidence alone. The learned counsel also had drawn the attention of this Court to the evidence of PW-5 the punch witness, and would contend that the cross-examination would disclose that this witness was not available at the time of drafting of panchanama. PW-5 deposed that by the time he had gone to the shop panchanama was drafted and he signed panchanama as asked by police. This witness also deposed that he does not know when M. Os. 1 to 11 were seized on that day. Learned counsel would further contend that on the strength of this evidence, the conviction and sentence definitely cannot be sustained. The learned counsel also placed reliance on the (sic) decisions md. Usuf Khan v. Emperror, AIR 1929 Nagpur 215; Haroom Haji Abdulla v. State of Maharashtra, AIR 1968 SC 832 : 1968 Cri LJ 1017; Dagdu v. State of maharashtra, AIR 1977 SC 1579 : 1977 Cri lj 1206, and Balwant Kaur v. Union Territory of Chandigarh, AIR 1988 SC 139 : 1988 cri LJ 398.

( 4 ) PER contra the learned Additional Public prosecutor explained the scope, ambit and object of the Act and also placed strong reliance on State of West Bengal v. Swapan kumar Guha, AIR 1982 SC 949 : 1982 Cri lj 819. The learned Additional Public Prosecutor would submit that in the light of Section 3 of the Act, the evidence of PW-1 would be definitely in the nature of accomplice evidence. But, however, the counsel would contend that t