Territorial jurisdiction in cheque dishonour cases depends on completion of an offence ingredient, not bank deposit or notice posting.

Territorial jurisdiction for Section 138 cheque dishonour complaints lies only where an ingredient of the offence is actually completed. Deposit of the cheque with the payee's bank at Delhi did not confer jurisdiction because the cheque is presented to the drawee bank and the collecting bank acts only as an agent for presentation. Mere despatch of the statutory demand notice from Delhi also did not create jurisdiction, as the relevant factor is receipt of notice and completion of the cause of action. On both grounds, Delhi courts lacked territorial jurisdiction, and the complaints were directed to be returned to the proper court.

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Issues: (i) Whether the courts at Delhi had territorial jurisdiction to try complaints under Section 138 of the Negotiable Instruments Act, 1881 on the basis that the cheques were deposited with the payee's bank at Delhi. (ii) Whether the courts at Delhi had territorial jurisdiction on the basis that the statutory notice under proviso (b) to Section 138 of the Negotiable Instruments Act, 1881 was issued from Delhi.

Issue (i): Whether the courts at Delhi had territorial jurisdiction to try complaints under Section 138 of the Negotiable Instruments Act, 1881 on the basis that the cheques were deposited with the payee's bank at Delhi.

Analysis: The relevant ingredients of the offence under Section 138 were identified with reference to the statutory scheme and the territorial-jurisdiction principles governing composite offences. The Court read Sections 6, 7, 64 and 72 of the Negotiable Instruments Act, 1881 together with Section 138 and held that the cheque must be presented to the drawee bank, while the collecting or payee bank acts only as an agent for presentation. On that construction, the place where the payee bank is situated does not constitute a place where any ingredient of the offence is completed. The observations in K. Bhaskaran were treated as not extending to confer jurisdiction on the court where the collecting bank is located.

Conclusion: No part of the cause of action arose in Delhi on account of deposit of the cheques with the payee bank, and Delhi courts had no territorial jurisdiction on that basis.

Issue (ii): Whether the courts at Delhi had territorial jurisdiction on the basis that the statutory notice under proviso (b) to Section 138 of the Negotiable Instruments Act, 1881 was issued from Delhi.

Analysis: The Court distinguished between issuance or despatch of notice and service or receipt of notice. Reading the proviso to Section 138 in the jurisdictional context, and following Harman Electronics, it held that the mere sending of notice from Delhi does not create jurisdiction there; the material consideration is where the notice is received and where the cause of action completes. The Court further held that the act of posting notice from Delhi is not itself an ingredient that confers jurisdiction on Delhi courts.

Conclusion: Delhi courts did not acquire territorial jurisdiction merely because the demand notice was posted from Delhi.

Final Conclusion: The impugned order was quashed and the complaints were directed to be returned for filing before the court having territorial jurisdiction.

Ratio Decidendi: For an offence under Section 138 of the Negotiable Instruments Act, 1881, territorial jurisdiction lies where an ingredient of the offence is actually completed, and neither deposit of the cheque with the payee's bank nor mere despatch of the statutory notice from a place is sufficient to confer jurisdiction there.

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