The Madras High Court has delivered a significant judgment affirming that hospitals cannot treat doctors like ordinary employees or workmen, especially when restrictive covenants such as non-compete and non-solicitation clauses are involved in professional contracts. The ruling came in a dispute between MIOT Hospitals and Dr Balaraman Palaniappan, a cardiothoracic surgeon who resigned and took up work at another hospital.
Justice N Anand Venkatesh of the High Court dismissed the hospital’s plea to refer the matter to arbitration, noting that the doctor had duly resigned and served the notice required under the agreement. The court found that clauses preventing doctors from practising elsewhere or soliciting patients are contrary to public policy and void under the Indian Contract Act because they unduly restrict a professional’s freedom and autonomy.
The judgment emphasised that doctors are independent professionals crucial to healthcare delivery and cannot reasonably be equated to “factory workers or regular employees.” The bench also imposed a ₹1 lakh cost on the hospital, underscoring judicial disapproval of contractual provisions that attempt to unduly limit a medical practitioner’s right to practise.
Legal experts say this ruling could reshape employment contracts in India’s private healthcare sector by limiting the use of unfair restrictive covenants and affirming professional autonomy for doctors — News as reported.
