Rules 95 and 96 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 95 sets the procedure before a contractor's licence can be revoked or suspended: an electronic show cause notice of fifteen days, a fifteen-day reply, and a reasoned (speaking) order. Rule 96 sets out how a contractor applies to amend a licence, with a seven-day deemed amendment and adjustment of the security deposit up or down.
Rule 95: if the licence was obtained by misrepresentation or suppression of a material fact, or conditions or the contract labour Part of the Code or rules were breached, the authority issues an electronic show cause notice of fifteen days; after the reply (within 15 days) it may pass a speaking order of revocation or suspension if continuing the business will cause grave harm to contract labour. Rule 96: apply in FORM-XXI on the Shram Suvidha Portal; the amended licence is issued immediately, and not later than seven days, failing which it is deemed amended and auto-generated; security goes up or down proportionately.
The Code provisions behind the rules
Section 51(1) of the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code) lets the designated authority, if satisfied that a licence was obtained by misrepresentation or suppression of a material fact, or that the holder failed to comply with its conditions or contravened the contract labour Part or the rules, revoke or suspend the licence after giving the contractor an opportunity of showing cause, "in accordance with the procedure as may be prescribed by the Central Government", and without prejudice to other penalties. Section 51(2) lets the authority amend a licence, subject to the rules. Section 50(2) separately allows suspension or cancellation after show cause for failure to intimate a work order. See our sections 51 and 52 explainer.
The Central Rules apply where the Central Government is the appropriate Government. Where the State is the appropriate Government, State rules govern revocation and amendment. If your contractor business faces a notice, our legal dispute resolution team can help you prepare a reply and examine appeal options.
Rule 95: revocation and suspension
The steps
| Step | What the rule says |
|---|---|
| Grounds (95(1)) | Licence obtained by misrepresentation or suppression of any material fact; failure to comply with licence conditions; or contravention of any provision of Part I of Chapter XI of the Code or the rules |
| Show cause (95(1)) | The authority issues a show cause notice of fifteen days, electronically |
| Reply (95(2)) | The contractor replies within 15 days of receipt of the notice |
| Decision (95(2)) | If the authority is of the opinion that continuation of the contract business is going to lead to grave harm to the contract labours, it may pass a speaking order recording reasons for revocation or suspension or otherwise, communicated electronically or by speed post |
| Copies (95(3)) | Copy endorsed to the Chief Labour Commissioner (Central), concerned Labour Enforcement Officer (Central) and concerned State authorities |
| Lifting suspension (95(4)) | If the contractor has complied with the provisions of the Code and rules within the stipulated time period, the authority shall revoke the suspension by a speaking order; otherwise suspension may be continued |
| Revocation for non-compliance (95(5)) | If the contractor fails to comply with the order in sub-rule (1), the authority may forthwith pass an order of revocation, recording reasons, communicated electronically or by speed post and endorsed to the same officers |
Points to note
- "Speaking order". The order must record the reasons. A bare cancellation without reasons does not match the rule.
- The grave harm test. The authority's opinion that the continuation of the business will lead to grave harm to contract labour is the stated trigger for a speaking order under sub-rule (2). The text does not define "grave harm". This is a point to argue in a reply.
- Sub-rule (5) refers to "the order in sub-rule (1)". Sub-rule (1) as printed contains a notice, not an order. The reference appears to mean the notice or the direction to comply. The text is as published; read it with the sub-rule (4) reference to a "stipulated time period".
- Time period for compliance. The text of sub-rule (4) speaks of compliance within "the stipulated time period" but does not state how long. The rule is silent; see the notice itself.
- Effect on workers and principal employers. The text does not say what happens to existing work orders during suspension. Principal employers should check their contracts and take advice before relying on a suspended licence. Under section 54 of the Code, employment of contract labour through a contractor who needs a licence but has none is deemed a contravention.
- Appeal. An order under section 51 can be appealed under section 52. See our rule 97 article for the appeal route and its time limit.
Rule 96: amendment of licence
| Sub-rule | What it says |
|---|---|
| 96(1) | The contractor applies electronically in FORM-XXI on the Shram Suvidha Portal, giving details of the amendment and uploading the licence, proof of identity and address of the employer as specified in the Form |
| 96(2) | The Form is signed digitally or in any other manner required on the portal |
| 96(3) | The applicant is responsible for the veracity of all information submitted |
| 96(4) | Fees for amendment are as in rule 90(4) |
| 96(5) | The amended licence is issued electronically immediately, if the application is complete, but not later than seven days from submission of the complete application; otherwise it is deemed amended and auto-generated |
| 96(6) | After the amended licence, proportionate security deposit is returned if contract labour decreases, and additional security is deposited if it increases |
The Code's section 48(3) already provides that a contractor who wants to increase the number of contract labour applies for amendment and deposits the security specified in the amended licence for the balance period. Form XXI's amendment section asks for the licence number and date, LIN and PAN, name and address, the maximum number of contract labour presently employed, e-payment details and other details requiring amendment, with a note that additional fee or security is deposited when the maximum increases.
Two points are not stated. The text does not say which fee applies on an amendment (the full table fee for the new band, or the difference); it only says "as specified in sub rule (4) of Rule 90". The text also does not give a time for refunding the proportionate security on a decrease.
Practical examples
Example 1. A contractor receives an electronic show cause notice alleging it did not pay minimum wages to contract labour. It replies within fifteen days, shows payment proof and a corrected wage register. The authority is not satisfied that continuation will cause grave harm, and no speaking order is passed.
Example 2. A contractor's licence is suspended by a speaking order. It complies with the Code and rules within the stipulated time. Under rule 95(4) the authority shall revoke the suspension by a speaking order.
Example 3. A contractor wins a larger work order and needs more workers than its licence allows. It applies in Form XXI for amendment, pays the additional fee and security. If the amended licence is not issued in seven days from a complete application, it is deemed amended and auto-generated.
Compliance checklist
- Reply within fifteen days of any show cause notice, with documents.
- Keep the licence conditions file and wage and statutory proofs ready.
- Watch the stipulated period in any suspension order.
- Apply for amendment before headcount exceeds the licence maximum.
- Keep portal acknowledgements for the seven-day clock.
Need help with a show cause notice or licence amendment?
A notice on revocation or suspension has a short clock, and a reply must be complete. Our team can help you prepare it and review your options, including appeal. Start with our legal dispute resolution service.
Key takeaways
- Rule 95 requires a fifteen-day electronic show cause notice before revocation or suspension.
- The contractor has fifteen days from receipt to reply; a speaking order records reasons.
- Copies of the order go to the Chief Labour Commissioner (Central), the Labour Enforcement Officer (Central) and State authorities.
- Suspension is lifted by speaking order once the contractor complies within the stipulated time.
- Rule 96 amendments are filed in Form XXI; issue within seven days or deemed amended.
- Security rises or falls proportionately with labour numbers.
- State rules apply where the State is the appropriate Government.
Read next
- Sections 51 and 52 of the OSH Code: revocation of licence and appeal
- Rule 97: appeal against licensing orders
- Rules 93 and 94: responsibility of contractor and intimation of work order
- Penalties under the Contract Labour Act
Disclaimer: Based on the Occupational Safety, Health and Working Conditions Code, 2020 (as enacted) and, where noted, the Occupational Safety, Health and Working Conditions (Central) Rules, 2026 (G.S.R. 345(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.