Dear Koteswar,
I think that the cashew processing unit where such daily-wage-based contract labor is engaged must be a factory coming under the purview of the Factories Act, 1948. Therefore, the Annual Leave With Wages prescribed under section 79 of the Act would accrue after completion of 240 days of service in every block of the preceding 12-month period despite being contract labor on a daily wage basis. According to the provision of section 79, it is encashable only on termination of employment.
However, the widely followed industry practice, to my knowledge, is that people surrender it annually for cash benefit. You may also follow suit. But ensure the actual disbursement by the contractor on proper vouchers then and there in view of the principal employer's vicarious liability under section 21(4) of the CLRA Act 1970.