It's the responsibility of the Principal Employer to ensure that the Contractor is fully complied with all legal formalities. Imposing any penalty or not is not going to obsolve the PE from the accruing legal liabilities when contractor failed to comply with. Withhold his bills till such time he renews his licence. Incidentally check this out-during the days of pandemic state govts. have eased automatic renewal of licences just by remitting the renewal fees online. If so it should solve this issue. I & other members already shared the Notifications issued by various state govts from time to time in this Forum. Trace & use them.
From India, Bangalore