Doctors Are Not Regular Workers, Hospitals Can't Restrain Them From Joining Other Hospitals: Madras High Court

The Madras High Court has recently observed that a hospital cannot treat the doctors working with it as normal employees or restrain them from taking up employment at other hospitals post resignation. "A doctor is an independent professional, who cannot be stopped from rendering his services wherever he wants to and also cannot be stopped from attending to patients just because those patients were earlier taking treatment in the petitioner hospital. When it comes to running a hospital, there is no question of a rival hospital and each hospital is an independent entity, which is being run to serve the patients and the society at large," the court observed. Justice Anand Venkatesh noted that the doctor is not like a workmen in a factory, or regular employees. The court remarked that doctors render their services to hospitals, and that hospitals would not be able to survive without such services. “Therefore, by no stretch, a hospital can treat a doctor like a workman in a factory or a technical person or a regular employee employed by an organization in the field of technology and other service sectors,” the court said. The court also noted that the hospitals could not have "rivalry" among themselves as it was not similar to a commercial establishment. The court noted that the rivalry between hospitals itself was a misnomer since a hospital was an independent entity, running to serve patients and not a commercial business. The court was hearing a petition filed by MIOT Hospitals in Chennai under Section 11(6) of the Arbitration and Conciliation Act seeking to appoint a sole arbitrator to adjudicate its dispute with a doctor regarding a professional agreement. On September 8, 2022, the hospital entered into a professional agreement with the doctor for engaging his services. As per the agreement, the doctor was to extend his services for 3 years, which would include outreach clinics, camps, and short/long term overseas secondments. After 2 years and 7 months, the doctor sent an email communication to the Hospital, expressing his intention to resign from the hospital for personal reasons. The hospital replied that the agreement mandated 3 months' notice or alternatively, to pay 3 months' professional fees in lieu of the notice period. Later, on coming to know that the Doctor had joined Apollo Speciality Hospital, the hospital invoked the arbitration clause alleging that the doctor had violated the terms of contract and also claimed liquidated damages to the tune of Rs 42 Lakh. Upon perusing the contract, the court noted that the Hospital had included confidentiality, non-solicitation and non-compete clauses in its contract. The court expressed its displeasure in hospitals incorporating such clauses in an agreement with a doctor. The court noted that either the contract was a result of copy paste syndrome or the hospital had forgotten that it was running a hospital t serve the patients and were indirectly admitting that they were a profit-making entity. The court added that such clauses demean the stature of a doctor. It said that a doctor was an independent professional and could not be stopped from rendering his services wherever he wants. The court added that the doctor could not be prevented from attending patients just because they were taking treatment in a different hospital earlier. The court noted that the contract between the hospital and the doctor was hit by Section 27 of the Contract Act, since the doctor was being prevented from exercising his lawful profession. The court also noted that the contract was hit by Section 23 of the Contract Act since it was opposed to public policy. Thus, the court noted that the contract would be void ab initio and the arbitration clause contained in the contract would not be enforceable. The court also noted that the doctor had given his resignation email on January 29, 2024 itself and had requested to relieve him from his duties on 29th April 2025. Thus, the court found that the doctor had given 3 months' notice before resignation and there was no violation of contract, to initiate arbitration proceedings The court thus dismissed the hospital's plea and imposed a cost of Rs 1 Lakh on the hospital, to be paid to the doctor. Counsel for Petitioner: Mr. P. S. Suman Counsel for Respondent: Mr. S. Balamurugan Case Title: MIOT Hospitals Private Limited v. Dr.Balaraman Palaniappan Citation: 2026 LiveLaw (Mad) 85 Case No: Arbitration O.P.(Com.Div.) No.708 of 2025Click Here To Read/Download The Judgment

Doctors Are Not Regular Workers, Hospitals Can't Restrain Them From Joining Other Hospitals: Madras High Court

Upasana Sajeev

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