The problem has come up because you have not followed the provisions of Contract Labour Regulations Act (CLRA) properly. The act mandates that the while disbursement of the salary to the contract workers, it has to be done in front of the representative of the principal employer. In your case when you came to know that contractor is not passing the monthly salary to the workers, then you should have stopped paying to him and deposited the salary in the bank account of the respective employee.
Principal employer is ultimately responsible to ensure that the contract workers get their payment. Now in your case, you wanted to take undertaking from each contract worker that onus of non-payment of wages to them rests with the contractor and they will not raise any claim to you. Well gentleman, by obtaining this kind of undertaking if you think that you can absolve your responsibility then it is a myth. In the eyes of the CLRA, this undertaking does not hold water. Therefore, follow up with the contractor so that he clears the contract workers' legitimate dues.
From India, Bangalore
Even if you take an undertaking and they also give you the same it does not get you any protection from payment of unpaid salaries and bonuses as a principal employer.
As a PE you are legally bound to pay the same, how you do it is your problem.
For how many years TOPS has not paid bonus? What have you done as PE to force contractor to pay salary/wages on time? How & why you could not force him to pay while you had all the controls?
If contractor is not paying, you can directly pay and set off against contractor's bills.
From India, Thane