Cheque dishonour in a commercial transaction does not itself prove cheating, criminal breach of trust, or territorial jurisdiction for process.

Mere dishonour of cheques or non-payment in a commercial sale transaction does not, without more, establish cheating or criminal breach of trust. The complaint lacked any allegation of entrustment or dishonest misappropriation for criminal breach of trust, and it also failed to show fraudulent or dishonest intention at the inception of the transaction, which is essential for cheating. The Court further noted that no part of the cause of action arose within the Magistrate's jurisdiction, so territorial jurisdiction to issue process was absent. On those grounds, the criminal proceedings were quashed.

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Issues: (i) Whether the criminal complaint disclosed the ingredients of cheating or criminal breach of trust, or only a civil dispute arising from non-payment for goods; (ii) Whether the Magistrate had territorial jurisdiction to issue process.

Issue (i): Whether the criminal complaint disclosed the ingredients of cheating or criminal breach of trust, or only a civil dispute arising from non-payment for goods.

Analysis: The allegations showed a commercial transaction for sale and purchase of goods, followed by dishonour of cheques and non-payment. For criminal breach of trust, entrustment and dishonest misappropriation or conversion of property must be shown, which were absent. For cheating, the decisive requirement is fraudulent or dishonest intention at the inception of the transaction; subsequent non-payment or dishonour of cheques, by itself, does not establish cheating. The complaint and statements did not allege any act of inducement from the beginning, and the conduct relied upon was only subsequent conduct.

Conclusion: No offence of cheating or criminal breach of trust was made out, and the prosecution could not be sustained on those allegations.

Issue (ii): Whether the Magistrate had territorial jurisdiction to issue process.

Analysis: The record showed that the parties resided in different districts, the cheques were issued at the appellant's place, and no part of the cause of action was shown to have arisen within the jurisdiction of the court that took cognizance. In the absence of material showing territorial nexus, the Magistrate could not validly issue summons.

Conclusion: The Magistrate lacked territorial jurisdiction to issue process.

Final Conclusion: The criminal proceedings were quashed because the complaint did not disclose the alleged offences and the court taking cognizance lacked territorial jurisdiction.

Ratio Decidendi: Mere dishonour of cheques or failure to make payment in a commercial transaction does not amount to cheating or criminal breach of trust unless fraudulent or dishonest intention at the inception is shown, and criminal process cannot be issued without territorial jurisdiction.

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