Court directs inclusion of M/s Incredible Placement Services Pvt. Ltd's bid, emphasizing labour licence only needed post-contract award and pre-payment, aligning with 2020 Labour Commissioner circular.
In a significant judgment delivered on September 26, 2026, the Jammu & Kashmir and Ladakh High Court, presided over by Justice Mohd. Yousuf Wani, held that the submission of a labour registration licence cannot be mandated as a precondition for participation in a tender process unless explicitly stated in the tender documents. The Court's decision came on a writ petition filed by M/s Incredible Placement Services Pvt. Ltd, which had been disqualified from a Government of India tender for allegedly failing to submit a labour registration licence for employing 100 workers in a day.
The petitioner, engaged in providing cleaning, sanitation, security, and manpower services, participated in a tender issued by the Ministry of Defence via the GeM Portal. Despite meeting all stipulated conditions, the firm was disqualified on the ground of non-submission of the labour registration licence. The petitioner contended that this requirement was not explicitly mentioned as a pre-requisite in the tender documents and relied on a 2020 circular issued by the Jammu and Kashmir Labour Commissioner. The circular categorically stated that principal employers should not demand a contract labour licence for tender participation but may require it only after the contract is awarded and before payment release.
The Court examined the tender documents and found no specific or unambiguous stipulation mandating the licence as a pre-condition. Furthermore, it drew upon the precedent set by the Supreme Court in M/s Trident Softech Pvt. Ltd v. State of Orissa (2003), which clarified that a labour contract licence is generally obtained post-award of contract, not during the bidding stage.
Rejecting the respondents' argument that certificate submission was a pre-condition under the Notice Inviting Tender (NIT), the Court emphasized that tender terms must be clear and avoid causing bona fide errors by bidders. It also noted that the disqualification decision was discriminatory, as other bidders were allowed to prove their credentials post-submission.
Consequently, the Court directed the respondents to consider the petitioner's technical bid alongside other bids, provided other requirements are met and the tender process has not been finalized. The labour registration licence may be sought only after contract allotment and before payment release.
This ruling clarifies the legal position on labour licence requirements in tendering, reinforcing that procedural fairness and transparency must prevail in government procurement processes. It protects bidders from arbitrary disqualification and aligns with labour regulatory policies aimed at streamlining tender participation.
Bottom Line:
Tender matter - Non-submission of labour registration/licence cannot be insisted upon as a pre-condition for participation in tender process unless such requirement is clearly, specifically and unambiguously provided in tender documents - Such licence can be required only after allotment of contract and before release of payment.
Statutory provision(s):
Contract Labour (Regulation and Abolition) Act, 1970; Circular No. LC/Enf/2020/1349-63 dated 20.11.2020 issued by the Office of Labour Commissioner, Jammu & Kashmir; Tender terms and conditions under GeM Portal tender process.
