A contract labour licence cannot be required as a precondition to tender participation.

The petitioner, a services contractor, participated in a January 2026 GeM tender issued by the respondents.

Its technical bid was disqualified for failing to submit a labour registration licence/certificate for employing 100 workers per day.

The petitioner challenged the disqualification, arguing that the tender did not make the licence a precondition and that a J&K Labour Commissioner circular dated 20 November 2020 barred requiring such a licence at the tender-participation stage.

The respondents maintained that the tender required the relevant documents.

The petitioner sought permission to participate in the tender process.

1. Whether the respondents could disqualify the petitioner’s technical bid for failure to submit a labour registration licence when the tender documents did not specifically require it as a precondition.

2. Whether the petitioner’s technical bid could be considered, subject to compliance with the other tender requirements and the tender process not having been finalized.

The Court relied on the principle that tender requirements must be clearly, specifically, and unambiguously stated in the tender documents; a bid cannot be rejected for non-compliance with an unstated requirement.

It also relied on the J&K Labour Commissioner’s circular dated 20 November 2020, which directs Principal Employers not to require a contract labour licence as a precondition to participation in tendering, but to seek the licence after award and before releasing payment.

The Court agreed with the reasoning in M/S Trident Softech Pvt. Ltd. v. State of Orissa and Others, 2003 Supreme (Ori) 894, where rejection for non-submission of a labour contract licence was held unjustified in the absence of a clear tender stipulation.

The Court referred to the Contract Labour Act, 1970, in recording the petitioner’s argument, but did not set out or apply a specific statutory provision.

The Court found that the petitioner had been disqualified for not submitting a licence to employ 100 workers per day, but that the requirement did not appear as a specific precondition in the tender terms or documents.

Applying the rule that tender requirements must be clearly stated, and relying on the Labour Commissioner’s circular, the Court held that the licence could be required after contract allotment, rather than at the bid-submission stage.

It agreed with the reasoning in Trident Softech, where rejection for non-submission of a labour contract licence was held unjustified in the absence of a clear tender stipulation.

The bid was to be considered alongside the other bids for comparative analysis, provided the petitioner met the other requirements and the tender process had not already been finalized by issuance of the contract.

The writ petition and connected application were disposed of.