P. S. NARAYANA, J. ( 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. 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 the evidence of PW-5 is relating to seizure, and this is sufficient corroboration. 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 the evidence of PW-5 is relating to seizure, and this is sufficient corroboration. The counsel also would contend that there is ample material available on record to show that the accused was running the scheme in contravention of Sections 3 and 4 of the act and hence, the conviction and sentence imposed in this regard are to be confirmed. Strong reliance was placed on G. L. Gupta v. Assistant Collector, Customs, AIR 1971 sc 28 : 1971 Cri LJ 1. ( 5 ) HEARD both sides. ( 6 ) PW-7 the Investigating Offficer in pursuance of the panchanama had suo motu registered the crime. After completing investigation filed charge-sheet stating that the accused started money circulation scheme in the name and style of Indira Finance enterprises by enrolling 1500 members and by collecting Rs. 200/- per month each, for a period of 51/2 years and issued maturity certificate dated 10-12-2001 and introduced lucky draw every month and gave prizes and thus violated the provisions of Section 4 of the Act. PW-7 also conducted raid in the shop of the accused on 16-3-1997 and seized registers and records as M. Os. 1 to 11 under ex. P. 6 panchanama, in the presence of PW-5 and another. ( 7 ) PW-1 is one of the members who joined the scheme. PW-1 deposed in his evidence that he joined as member in the scheme run by the accused by paying Rs. 200/- on 13-1-1997. The accused informed him that the lucky draw will be taken on 10th of every month. In the lucky draw taken on 12-3-1997, he became winner of one scooter with lucky draw No. 2348. PW-1 also deposed that he was not actually present when the lucky draw was taken and after coming to know that he became winner, he gone to the shop of the accused on the next day and enquired him. The accused replied that he was not the winner and that he has gone to another person. PW-1 had gone to Adilabad i Town Police Station and reported the incident by enclosing the receipt for Rs. 200/ and his membership number is 5301 under the scheme. Ex. The accused replied that he was not the winner and that he has gone to another person. PW-1 had gone to Adilabad i Town Police Station and reported the incident by enclosing the receipt for Rs. 200/ and his membership number is 5301 under the scheme. Ex. P1 is printed receipt as indira Enterprises and Finance, Adilabad. Ex. P2 is the Membership Card with account no. 2348 and maturity date as 13-7-2002. The name of the father of PW-1 is also noted in Ex. P2. ( 8 ) APART from the evidence of PW-1 the other evidence available on record is that of pw-5 the puanch witness, and PW-7 the investigating Officer. All other witness were declared hostile. ( 9 ) SECTION 3 of the Act dealing with banning of Prizes, Chits and Money Circulation scheme or enrolment as members or participation reads as under :"section 3 : Banning of prize chits and money circulation scheme or enrolment as members or participation : No person shall promote or conduct any prize chit or money circulation scheme, or enroll as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme. " ( 10 ) SECTION 4 of the Act dealing with Penalty for contravening the provisions of Section 3 reads as under : section 4 : Penalty for contravening the provisions of Section 3 : Whoever contravenes the provisions of Section 3 shall be punishable with imprisonment for a term which may extend to three years or with fine which may extend to five thousand rupees or with both : provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the Court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees. ( 11 ) IN the light of the specific prohibition in relation to enrolment as member and also participation in it or otherwise specified in Section 3 of the Act there cannot be any controversy that the evidence of PW-1 also would be in the nature of accomplice evidence. ( 12 ) IN Md. ( 11 ) IN the light of the specific prohibition in relation to enrolment as member and also participation in it or otherwise specified in Section 3 of the Act there cannot be any controversy that the evidence of PW-1 also would be in the nature of accomplice evidence. ( 12 ) IN Md. Usuf Khan v. Emperor s case (AIR 1929 Nag 215) (supra) while dealing with trustworthiness of accomplice evidence the Apex Court held as under :"accomplice evidence is untrustworthy for three reasons : (i) because an accomplice is likely to swear falsely in order to shift the guilt from himself; (ii) because an accomplice, as a participator in crime, and consequently an immoral person, is likely to disregard the sanction of an oath; and (iii) because he gives evidence under promise of or in expectation of a pardon or in the expectation of an implied pardon, if he discloses all he knows against those with whom he acted criminally; and this hope would lead him to favour the prosecution. If then, the principal evidence is of accomplices, it is tainted evidence and hence there is need for corroboration. " ( 13 ) IN Haroom Haji Abdulla v. State of maharashtra s case (1968 Cri LJ 1017) (supra) the Apex Court held as under :"the law as to accomplice evidence is well settled. The Evidence Act in Section 133 provides that an accomplice is a competent witness against an accused person and that a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. The effect of this provision is that the Court trying an accused may legally convict him on the single evidence of an accomplice. To this there is a rider in Illustration (b) to Section 114 of the act which provides that the Court may presume that accomplice is unworthy of credit unless he is corroborated in material particulars. This cautionary provision incorporates a rule of prudence because an accomplice, who betrays his associates, is not a fair witness and it is possible that he may. to please the prosecution, weave false details into those which are true and his whole story appearing true, there may be no means at hand to sever the false from that which is true. to please the prosecution, weave false details into those which are true and his whole story appearing true, there may be no means at hand to sever the false from that which is true. It is for this reason that Courts, before they act on accomplice evidence, insist on corroboration in material respects as to the offence itself and also implicating in some satisfactory way, however small, each accused named by the accomplice. In this way the commission of offence is confirmed by some competent evidence other than the single or unconfirmed testimony of the accomplice and the inclusion by the accomplice of an innocent person is defeated. This rule of caution or prudence has become so ingrained in the consideration of accomplice evidence as to have almost the standing of a rule of law. ( 14 ) IN Dagdu v. State of Maharashtra s case (1977 Cri LJ 1206) (supra) it was held as under : "though an accomplice is a competent witness and though a conviction may lawfully rest upon his uncorroborated testimony, yet the Court is entitled to presume and may indeed be justified in presuming in the generality of cases that no reliance can be placed on the evidence of an accomplice unless that evidence is corroborated in material particulars, by which is meant that there has to be some independent evidence tending to incriminate the particular accused in the commission of the crime. ( 15 ) RELIANCE also is placed on Balwant kaur v. Union Territory of Chandigarh s case (1988 Cri LJ 398) (supra) wherein it was held as under :"the approver s evidence in regard to the complicity of the appellant in the conspiracy lacks corroboration on certain material particulars necessary to connect the appellant. A little more reassurance than is afforded by the State of evidence in the case is perhaps necessary to convict appellant. Appellant, in the circumstances, would be entitled to the benefit of doubt. " ( 16 ) THERE cannot be any controversy in relation to this proposition of law. As already referred to supra apart from the evidence of p. W. 1, the evidence of P. W. 5 the panch witness and P. W. 7 the Investigating Officer alone are available on record for consideration. The other witnesses were declared hostile. " ( 16 ) THERE cannot be any controversy in relation to this proposition of law. As already referred to supra apart from the evidence of p. W. 1, the evidence of P. W. 5 the panch witness and P. W. 7 the Investigating Officer alone are available on record for consideration. The other witnesses were declared hostile. It is pertinent to note that though p. W. 1 had given report, the action was not initiated on the report of P. W. 1. But the crime was registered suo motu by the Investigating officer. It is no doubt true that this kind of initiation of a proceeding by the investigating Officer cannot be found fault with. It is peculiar when the aggrieved party p. W. 1 had given a report, without treating that report as the first information report furnished for the registration of the crime, registering the case suo motu would tell upon some thing fishy about the investigating agency. Nothing more need to be commented at this stage. ( 17 ) THE evidence of P. W. 5, if carefully scrutinised, it is doubtful, whether M. Os. 1 to 11 were seized in his presence from the shop of the accused, since in cross-examination he had specifically deposed that panchanama was drafted by the time he had gone to the shop of the accused on that day and he signed the panchanama as asked by the police and he does not know whether m. Os. 1 to 11 were seized on that day and he cannot say whether the registers etc. , shown to him are the same registers etc. , found in the shop of accused at the time of seizure. He signed on the panchanama as directed by the police and he does not know the contents of Ex. P6. This is the nature of evidence by the panch witness. At any stretch of imagination, it cannot be said that this witness had corroborated the evidence of P. W. 1 in any way whatsoever. ( 18 ) OTHER evidence is that of Investigating officer P. W. 7, who had deposed about the investigation, panchanama, seizure of m. Os. and other details. At any stretch of imagination, it cannot be said that this witness had corroborated the evidence of P. W. 1 in any way whatsoever. ( 18 ) OTHER evidence is that of Investigating officer P. W. 7, who had deposed about the investigation, panchanama, seizure of m. Os. and other details. ( 19 ) IN State of West Bengal v. Swapan kumar Guha s case (1982 Cri LJ 819) (supra) the Apex Court while dealing with the object of the Act, observed as under :"to be a money circulation scheme, a scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of the members into the scheme. The scheme has necessarily to be judged as a whole, both from the viewpoint of the promoters and also of the members. Various individuals may invest their monies in their business, which may yield very high profits. Many individuals also may indulge in speculative business in expectation of high return of their money and may succeed or may not succeed in speculative transactions. If such transaetions are made openly and not in violation of any law, it can never be said that such investment has been made for making quick or easy money. If a part of the transaction is not aboveboard and is secretive that will not make any difference and the transaction cannot be considered to be a scheme for the making of quick or easy money, though the transaction may offend against revenue laws or any other law. Transactions in black money do not come within the mischief of this Act. In the absence of anything to indicate that the firm in question makes any investment in consultation with depositions, the acts of a firm indulging in high risk investments and also advancing monies to political parties do not go to show that the firm makes quick money. It is no doubt true that the firm pays a larger amount by way of interest than payable on the basis of the rates stipulated in the loan certificate. The clandestine manner of payment of interest in excess of the stipulated rate does not, any way, indicate the existence of any scheme for making quick or easy money. None of the requirements of a money circulation scheme is satisfied in the instant case. The clandestine manner of payment of interest in excess of the stipulated rate does not, any way, indicate the existence of any scheme for making quick or easy money. None of the requirements of a money circulation scheme is satisfied in the instant case. As there is no money circulation scheme, there can be no scheme as contemplated in the act in view of the definition of scheme in the Rules. When the materials do not disclose that the firm is promoting or conducting a money circulation scheme, the Act has, therefore, no application to the firm. " ( 20 ) NO doubt strong reliance was placed by the learned Additional Public Prosecutor on G. L. Gupta v. Assistant Collector, Customs case (supra) to the effect that while appreciating the evidence of Investigating officer no general rule can be laid down that the evidence cannot be relied upon for conducting of search unless it is corroborated and the question depends on the facts of each case. ( 21 ) AS already observed by this Court, though P. W. 1 had lodged the report no action was initiated and no crime was registered in pursuance thereof. But a suo motu crime had been registered by the Investigating officer. The evidence of panch witness is not so clear and categorical and definitely it is highly doubtful whether the seizure of M. Os. had taken place as spoken to by p. W. 7. ( 22 ) HENCE in the light of the evidence of p. W. 5 this Court is not inclined to rely upon the evidence of P. W. 7 especially in the light of the fact that the crime was registered suo motu, despite the fact that P. W. 1 had lodged the report. It is needless to say that the evidence of P. W. 1, which is in the nature of accomplice evidence lacks any corroboration in any of the particulars. Hence, viewed from any angle the findings recorded by the learned Judge cannot be sustained for want of legally acceptable evidence and the appellant/accused is entitled to benefit of doubt. ( 23 ) ACCORDINGLY, acquittal is recorded and the Criminal Appeal is allowed. The appellant is entitled to refund of the fine amount, if any, paid by him. Appeal allowed.