“In Personam vs. In Rem” – Madras High Court Carves Out a Jurisdictional Safe-Harbour for Contract-Based Challenges to Google Play Billing Terms

1. Introduction

On 11 June 2025, the Madras High Court (Justice Senthilkumar Ramamoorthy) delivered a significant ruling in Google India Pvt Ltd & Anr v. Testbook Edu Solutions Pvt Ltd & Ors (2025 MHC 1333). The decision arose at the preliminary stage on an application by two Google entities (6th & 7th defendants) seeking rejection of Testbook’s plaint under Order VII Rule 11(a)&(d) of the Code of Civil Procedure, 1908 (CPC).

Testbook, a prominent ed-tech company, challenges the legality and enforceability of:

• Google’s Service-Seller Payment Policies,
• Clause 15.3 of the Developer Distribution Agreement (DDA), and
• The service fees (10-30%) under Google Play Billing System (GPBS) & User-Choice Billing (UCB).

Google contended that the suit is barred by law because: (i) exclusive jurisdiction lies with the Competition Commission of India (CCI) under the Competition Act, 2002, and (ii) the Payment and Settlement Systems Act, 2007 (PSS Act) implicitly ousts civil-court jurisdiction.

2. Summary of the Judgment

The High Court dismissed Google’s application, holding that:

1. The plaint discloses a cause of action in contract—alleged novation, undue influence, unconscionability, tortious interference and waiver under the Indian Contract Act, 1872 (ICA).
2. Section 61 of the Competition Act does not bar civil courts where the dispute is in personam—i.e. confined to the contractual relationship between parties—and not a market-wide competition inquiry.
3. The PSS Act lacks an express or implied bar on civil remedies for contractual invalidity; its dispute-resolution panel or RBI oversight is not a comprehensive alternative forum.
4. An exclusive-jurisdiction clause in a private contract is not “law” for purposes of Order VII Rule 11(d) CPC; at best it supports an application for arbitration or transfer, not rejection of the plaint.

Consequently, Testbook’s suit survives and will proceed to trial on merits.

3. Analysis

3.1 Precedents Cited & Their Influence

• Division Bench Judgment (OSA Nos. 97-110/2023, 19 Jan 2024)
  Earlier, multiple app developers had their suits rejected. The Bench treated their pleadings as competition claims centred on “abuse of dominant position.” Justice Ramamoorthy distinguishes that batch because Testbook newly pleads waiver and places reliance on ICA provisions—issues the Division Bench said were absent or inadequately pleaded.
• Dhulabhai v. State of MP (AIR 1969 SC 78)
  Classic authority on ouster of civil jurisdiction: exclusion must be express or by necessary implication. Applied here to hold that neither Competition Act nor PSS Act bars the present suit.
• Sopan Sukhdeo Sable v. Asst. Charity Commr. (2004) 3 SCC 137
  Clarifies that reliefs claimed are not the cause of action; cited by plaintiff to show that difference in cause of action (contractual v. competition) mattered, even if reliefs overlap.
• GAIL v. IPCL (2023) 3 SCC 629 & LIC v. CERC (1995) 5 SCC 482
  Supreme Court precedents allowing courts to interfere with contracts where unequal bargaining power or unconscionable terms are alleged.
• Shri Mukund Bhavan Trust (2024 SCC OnLine 3844) & RBANMS Educational Institution (2025 SCC OnLine SC 793)
  Reiterate that courts must weed out suits barred by law at the threshold; Google invoked them—court found they did not apply on facts.

3.2 Legal Reasoning of the Court

1. Statutory Demarcation: Competition Act vs. Contract Law
   • CCI inquiries are in rem, focusing on market structure, dominance, and appreciable adverse effect on competition (Sections 3,4 & 19).
   • Testbook’s grievances target unilateral contractual amendments, waiver of service-fee rights, and unconscionability—issues confined to the parties and therefore in personam.
   • Section 61’s jurisdictional bar is triggered only where the matter is one that CCI “is empowered to determine”. Since CCI cannot grant private contractual relief or adjudicate ICA defences, Section 61 is inapplicable.
2. PSS Act Not a Complete Code for Civil Disputes
   The Act regulates payment systems, permits RBI to issue directions and prosecute offences, but provides no mechanism for declaring contractual clauses void or awarding damages. Absence of an express bar (unlike SARFAESI) means civil jurisdiction survives.
3. Order VII Rule 11 Threshold
   • Non-disclosure of cause of action: The plaint sets out detailed facts (paras 80-87) of Google’s conduct, alleged duress, waiver, network effects, and financial injury.
   • Bar by law: not satisfied because the alleged bars (Competition Act, PSS Act, forum-selection clause) are inapplicable.
4. Significance of New Pleading – Waiver
   Waiver, a contractual doctrine under Section 62 ICA, was absent in earlier suits and thus takes the matter outside the ratio of the Division Bench that had dismissed similarly structured suits. This single additional plank prevented res-judicata-like dismissal.

3.3 Potential Impact on Future Litigation & Industry

• Pleading Strategy: Plaintiffs can avoid the Competition Act bar by framing suits as contractual/unconscionability disputes and including doctrines such as waiver, misrepresentation or undue influence.
• Tech Sector Contracts: Digital-platform T&Cs may face intensified judicial scrutiny under domestic contract law even while CCI probes market-wide behaviour.
• Parallel Proceedings: The decision implicitly allows dual routes— private suits alongside or in lieu of CCI petitions—so long as claims are not “mutually destructive.”
• Greater Clarity on Section 61: Reinforces that the bar is not blanket, preserving a civil-court haven for individual grievances despite the overlap of factual matrices.
• Possible Appeals: Given earlier contrary Division Bench view, Google is likely to appeal; appellate courts/Supreme Court may have to resolve the emerging split.

4. Complex Concepts Simplified

Order VII Rule 11 CPC

Allows a court to reject a plaint at the very outset if it lacks a cause of action or is barred by law—saving judicial time and defendant effort.

In Personam vs. In Rem

In personam judgments bind specific parties; in rem judgments affect the public or market at large. CCI’s orders are largely in rem, whereas contract suits are in personam.

Dominant Position (Competition Act)

A firm’s power to operate independently of competitive forces or affect competitors/consumers. Abuse triggers CCI jurisdiction.

Waiver (Section 62 ICA)

Voluntary relinquishment of a known right. Here, Testbook argues Google waived the right to levy service fees by not enforcing them for years.

Unconscionability / Superior Bargaining Power

A contract term may be void if one party exploits overwhelming bargaining strength to impose unfair conditions on the other, depriving genuine consent.

5. Conclusion

Justice Ramamoorthy’s ruling delineates the borderline between competition regulation and private contractual adjudication. The Court:

• Affirms that civil courts remain open for challenges to contractual clauses on grounds of unconscionability, waiver, novation and undue influence, even where the same facts could also ground a competition claim;
• Clarifies that Section 61 of the Competition Act is triggered only for matters that CCI is exclusively empowered to decide—not for private law questions outside its remit;
• Rejects the notion that tech-platform disputes automatically belong before regulators; litigants may still obtain bespoke, in personam relief in civil courts.

Going forward, platform operators like Google must anticipate dual exposure: systemic scrutiny by the CCI and targeted contractual challenges in civil courts. Litigants, meanwhile, gain a roadmap for drafting pleadings capable of surviving Order VII Rule 11 objections by emphasising private-law doctrines. The stage is now set for a substantive trial that could further shape India’s evolving jurisprudence on digital-platform contracts and their limits.