Labour Licence Cannot Be Insisted Upon At Pre-Bid Stage Unless Specified In Tender Documents: J&K&L High Court
The High Court of Jammu & Kashmir and Ladakh has held that a labour registration licence cannot be insisted upon as a pre-condition for participation in a tender when such a requirement is not specifically stipulated in the tender documents.
The Court thus directed the authorities to consider the petitioner's technical bid without insisting upon the licence at the pre-allotment stage, subject to fulfilment of the other tender conditions.
The Court was hearing a petition filed by M/s Incredible Placement Services Pvt. Ltd., challenging its disqualification from a tender floated by Air Force Station, Srinagar, for providing cleaning, sanitation, disinfection, security, manpower and other services. The firm had been disqualified for failing to submit a labour registration licence/certificate for employing 100 workers in a day.
Justice Mohd Yousuf Wani, while passing the order, observed that “such a stipulation as a pre-requisite does not appear to be specific either from the terms and conditions of the contract or from the tender documents.”
The petitioner-firm had participated in an online tender issued by Air Force Station, Srinagar, in January 2026. It claimed to have fulfilled the tender requirements but was disqualified for non-submission of a labour registration licence/certificate for employing 100 workers in a day.
The firm contended that the licence was not prescribed as a pre-requisite under the tender conditions. It relied upon a circular dated November 20, 2020, issued by the J&K Labour Commissioner, which directed Principal Employers not to insist upon a contract labour licence as a pre-requisite for participation in tendering. The circular provided that the licence should be obtained after allotment of the contract and before release of payment.
The petitioner also relied upon M/s Trident Softech Pvt. Ltd. v. State of Orissa and Others, arguing that a technical bid could not be rejected for non-submission of a labour contract licence when the tender documents did not specifically require it.
Opposing the petition, the respondents submitted that the licence was a pre-requisite under the tender conditions. They relied upon paragraph 9 of the NIT, which provided for rejection of offers where bidders failed to upload the certificates or documents required under the bid document, ATC or corrigendum.
Court's Observations
The Court found that the matter could be disposed of at the initial stage through appropriate directions that would not prejudice the interests of either party. On examining the tender documents, it noted that the petitioner appeared to have been disqualified specifically for non-submission of the labour registration licence for employing 100 workers in a day.
However, the Court found no specific stipulation in the tender conditions or documents making the licence a pre-requisite for submitting the bid. It accordingly held,
“Such a requirement cannot be insisted upon as a pre-condition for submission of the bid document, such requirement can however, be insisted by the Principal Employer/executing agency after the allotment of the contract work and before any payment is released.”
The Court thus distinguished between a condition necessary for participation in a tender and a requirement that may be fulfilled after the contract is awarded. The fact that a licence may be required before payment is released does not, by itself, make its prior submission an eligibility condition at the bidding stage, Justice Wani explained.
The Bench then examined the precedent relied upon by the petitioner, M/s Trident Softech Pvt. Ltd. v. State of Orissa and Others, observing that the facts of that case “squarely resemble with the facts of the instant case.” The Court expressly agreed with the legal principle laid down therein.
The precedent emphasised the need for clarity in tender conditions. As reproduced in the order, it states,
“Law is well settled that whatever procedure be followed while inviting tenders, the terms which need to be complied with by an applicant must be clearly, specifically and unambiguously stated in the Tender Call Notice to avoid a bona fide error by an applicant.”
Applying this principle, the Court found that a bidder could not be disqualified for failing to submit a document when the tender documents did not clearly prescribe it as a pre-condition.
The Court also took note of the J&K Labour Commissioner's circular dated November 20, 2020, observing that it “also clarifies the issue.” The circular supported the distinction drawn by the Court between participation in the tender process and compliance with the licensing requirement after allotment.
The Court, however, did not direct unconditional acceptance of the petitioner's bid or award of the contract. Instead, it directed the authorities to allow the technical bid to be considered without insisting upon the labour registration licence at the pre-allotment stage, leaving the petitioner subject to the remaining tender requirements.
Case Title: M/s Incredible Placement Services Pvt. Ltd. v. Union of India and Others
Citation: 2026 LiveLaw (JKL) 326
Appearances: Naveed Gul, Advocate, for the petitioner; Faizan Ganai, CGSC, for the respondents.