$user = <$client_socket>;
 chomp($user); #remove the \n
 print "$prefix USER = $user\n";
    unless (open (USERNAME, "username")) 
     {
       print "ERROR:Cannot open username file.\n";
       exit(1); # ERROR
      }
    my $found;
    while(my $newusername = <USERNAME>)
        {
                chomp($newusername);
                if($newusername eq $user) 
                {
                $found = 1;
                last;
                }
                
                unless ($found) {
                print $client_socket "ERR\n";
                print "$prefix ERROR: user $user not allowed  Exiting.
+\n";
                close(USERNAME);
                exit(1);
                 }
        
    }
     #else, continue
     print $client_socket "ACK\n";  # approve the user.  
     #print "user $user is allowed.";
     close(USERNAME);
[download]

I tried what you said as above but still it got same problem..still its not goin on else part where user is approved.