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This paper reports the error correcting capability of an associative memory model built around the sparse network of cellular automata (CA). Analytical formulation supported by experimental results has demonstrated the capability of CA based sparse network to memorize unbiased patterns while accommodating noise. The desired CA are evolved with an efficient formulation of simulated annealing (SA) program. The simple, regular, modular, and cascadable structure of CA based associative memory suits ideally for design of low cost high speed online pattern recognizing machine with the currently available VLSI technology.