Territorial jurisdiction and transfer powers under criminal procedure were upheld for ESI complaints payable at the creditor's office.

Territorial jurisdiction under the Employees' State Insurance Act was upheld because contributions and returns were payable at the Corporation's Madras office, so the place of performance was there under the settled rule that the debtor must seek the creditor. The High Court also held that defects of local jurisdiction are not automatically fatal: a proceeding is not void ab initio merely for want of territorial competence, and the Code permits the High Court, where statutory conditions are met, to direct inquiry or trial by an otherwise competent court. The earlier contrary Madras view was rejected, and the trial before the Chief Presidency Magistrate was sustained.

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Issues: (i) Whether the Chief Presidency Magistrate had territorial jurisdiction to inquire into and try the complaints under the Employees' State Insurance Act, 1948; (ii) whether the High Court could direct the Chief Presidency Magistrate to try the cases or, in the alternative, transfer or clothe another competent court with jurisdiction under the Criminal Procedure Code, 1898.

Issue (i): Whether the Chief Presidency Magistrate had territorial jurisdiction to inquire into and try the complaints under the Employees' State Insurance Act, 1948.

Analysis: The statutory scheme required contribution to be paid to the Corporation and returns to be submitted to it at its office in Madras. Applying the settled rule that, where no place of payment is otherwise fixed, the debtor must seek the creditor, the place of performance was the Corporation's office. The facility of remitting payment through treasury outlets did not displace that legal obligation. On that basis, the complaints were within the territorial jurisdiction of the Chief Presidency Magistrate.

Conclusion: The Chief Presidency Magistrate had territorial jurisdiction to try the cases.

Issue (ii): Whether the High Court could direct the Chief Presidency Magistrate to try the cases or, in the alternative, transfer or clothe another competent court with jurisdiction under the Criminal Procedure Code, 1898.

Analysis: The Court distinguished between proceedings that are void ab initio for want of inherent competence and proceedings that are merely irregular for want of local jurisdiction. It held that the earlier line of cases treating every defect of territorial jurisdiction as fatal did not correctly state the law. Section 346(1) was read broadly enough to cover want of territorial or local jurisdiction in appropriate cases, and Section 526(1)(e)(i) empowered the High Court, where the statutory conditions were met, to direct inquiry or trial by a court otherwise competent but not locally empowered. The contrary view in the earlier Madras line of decisions was held not to be sound law.

Conclusion: The High Court could validly direct that the cases proceed before the Chief Presidency Magistrate, and the request for transfer or other relief based on want of territorial jurisdiction did not succeed.

Final Conclusion: The reference was answered in favour of sustaining the trial before the Chief Presidency Magistrate, and the direction already made for the cases to proceed there was confirmed.

Ratio Decidendi: A criminal proceeding not void ab initio for lack of inherent competence may be dealt with under the Code's provisions on territorial jurisdiction and transfer, and the High Court may, where the statutory conditions are satisfied, clothe a locally unempowered but otherwise competent court with jurisdiction.

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