Territorial jurisdiction under cheque dishonour law cannot be created in India when all material acts occurred in the United States.

Complaints under Sections 138 and 141 of the Negotiable Instruments Act, 1881 were held not maintainable before the Metropolitan Magistrate at Chennai because the cheques, underlying transaction, drawer, drawee bank and dishonour were all linked to the United States. Territorial jurisdiction for a Section 138 offence had to be determined by where the offence was committed, and jurisdiction could not be created in India merely by presenting the cheques through a Chennai bank branch or issuing notice from Chennai. The Court also held that provisions relating to foreign negotiable instruments governed civil liability and did not confer criminal jurisdiction on these facts. The proceedings were quashed as forum shopping and abuse of process.

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Issues: Whether the complaints under Sections 138 and 141 of the Negotiable Instruments Act, 1881, arising from cheques drawn and payable in the United States of America, could be entertained by the Metropolitan Magistrate at Chennai, and whether the proceedings were liable to be quashed for lack of territorial jurisdiction and abuse of process.

Analysis: The cheques, the underlying transaction, the drawer, the drawee bank, and the dishonour were all connected with the United States of America. The Court held that territorial jurisdiction for an offence under Section 138 must be determined by the place where the offence was committed, and that the complainant could not unilaterally create jurisdiction in India merely by presenting the cheques through a bank branch at Chennai or by issuing notice from Chennai. It relied on the scheme of the Negotiable Instruments Act, 1881, including the distinction between inland and foreign instruments and the provisions dealing with foreign negotiable instruments, and held that those provisions governed civil liability and did not extend criminal jurisdiction to India in the facts of the case. The Court further held that the proceedings amounted to forum shopping and abuse of process, since all material acts constituting the alleged offence had occurred outside India.

Conclusion: The complaints were not maintainable before the trial court at Chennai, and the criminal proceedings were quashed in exercise of inherent powers.

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