Key Points:
Madras High Court says hospitals cannot treat doctors like factory workers.
Court dismisses MIOT Hospital’s arbitration plea against a surgeon.
Doctor had given valid notice before resigning, court finds.
Judges disapprove restrictive non compete and non solicitation clauses.
Hospital ordered to pay Rs 1 lakh in costs to the doctor.
Chennai, Tamil Nadu: In a firm judgment on 24 February 2026, the Madras High Court declared that hospitals cannot treat doctors like workmen in a factory, technical staff, or ordinary employees. The court affirmed the independent professional status of medical practitioners while rejecting a corporate hospital’s attempt to enforce restrictive contractual terms.
Justice N Anand Venkatesh dismissed an arbitration petition filed by MIOT Hospital, which sought to refer its dispute with a doctor for arbitration. The court found that the doctor had already given valid notice of resignation, leaving no dispute that required arbitration.
The High Court stressed that doctors hold a distinct professional role that cannot be equated with labor in a factory or other technical employment. The judge observed that doctors can thrive without hospitals, whereas a hospital cannot exist without doctors supporting it by rendering their services.
The court cautioned private hospitals against classifying doctors as regular employees or imposing commercial employment models on them, noting that such an approach fails to recognize the unique nature of medical practice.
The case concerns Dr Balaraman Palaniappan, a cardiothoracic surgeon who entered into a professional agreement with MIOT Hospital on 8 September 2022. After serving for about two years and seven months, he resigned on 21 April 2025.
MIOT Hospital alleged that the doctor failed to comply with notice requirements and violated confidentiality, non solicitation, and non compete clauses by joining another corporate hospital. The hospital approached the High Court under the Arbitration and Conciliation Act seeking appointment of an arbitrator.
The High Court held that Dr Palaniappan had given prior notice before resigning, in accordance with the agreement. As a result, there was no subsisting dispute that required arbitration.
The court also expressed disapproval of attempts to enforce non compete and non solicitation clauses against doctors, indicating that such restrictions are incompatible with public policy in the context of the medical profession.
While dismissing the petition, the court imposed costs of Rs 1 lakh on MIOT Hospital, payable to the doctor.