S. 12 imposed a liability not to undertake or execute any work through contract labour without licence, a liability which continued until the licence was obtained and its requirement was complied with. It was an act which continued. Undertaking or executing any work through contract labour without a licence, therefore, constituted a fresh offence everyday on which it continued. Padam Prasad Jain v. State of Bihar, 1978 Lab IC 145.

Sections 12 & 2(1)(e)(ii)-Where a firm under all agreement undertook the work of holding and storage of another company's materials and for that purpose utilized the services of some labourers employed through sirdars, the firm, its partners and employees could not be prosecuted for not obtaining licence under S. 12 as the firm is an "establishment" within the meaning of S. 2(1)(e)(ii) and not the company's contractor. Assuming the partners and employees of the firm or any of them were principal employers, they could not be both contractors and principal employers in relation to the same establishment. Moreover, each of the sirdars was a contractor within the meaning of the act in relation to the firm i.e. the establishment. The concerned workmen having been supplied through the medium of sirdars, neither the firm nor the partners nor the employees could be deemed to be a contractor in relation to the said workmen. Their liability to take out a licence cannot, therefore, arise. Feroze Sons v. B. C. Basu, (1979) 54, FJR 158 (Cal).

S. 12-Sub-contractors or 'piece wagers' are equally responsible for obtaining licence and implementing the provisions of the Act and the Rules. Execution of a work in a government project by piece wagers through workers employed by them either directly or through khatedars must be in accordance with the licence obtained under S. 12 (1). Failure to obtain licence will amount to criminal offence punishable under Ss. 16 to 21 read with Rules 41 to 62 of the Rules. Labourers Working on Salal Hydro Project v. State of J & K, (1983) 2 SCC 181: (1983) 1 LLJ 494.