उक्खेवो तइयस्स अज्झयणस्स । एवं खलु जंबू ! तेणं कालेणं तेणं समएणं वाणारसी णामं णयरी । कोट्टुए चेइए । जियसत्तू राया ।
Beginning of the third chapter. Thus indeed, O Jambu! At that time, in that period, there was a city named Varanasi. The shrine was called Koshtuk. King Jiyasattu was the ruler.
The third chapter opens with the standard Agamic formula addressed to Jambu — the disciple of Sudharma Swami, who narrates these accounts in the chain of oral transmission. The chapter is set in Varanasi, one of the most ancient and spiritually significant cities in India, situated on the banks of the Ganga river. King Jiyasattu ruled there — the same king as in previous chapters, placing this story in the same period as Lord Mahavira's ministry. The local shrine is called Koshtuk, which served as the assembly place when Lord Mahavira visited.
Simply Put: The story begins in the great ancient city of Varanasi, during the time when Lord Mahavira was traveling and teaching.