Having the agreement on stamp paper is an important compliance requirement, though it is not a requirement under the Contract Act or Contract Labour Act. Motorising, on the other hand, has no visible impact.
The problem stems from the fact that in a court case by workers claiming that the contract is a sham, the courts look at how an agreement is executed and whether there is a principal-to-principal agreement made with an agency that is an independent business. Everything that can be done to show it is a normal business following all normal business processes is important.
In the case of unstamped agreements, it is alleged by the workers that the agreement never existed and was created just to present to the court after the complaint.
The other problem is that courts will refuse to enforce an unstamped agreement, and it will be invalid to produce as evidence. The new Supreme Court judgment on refusal to enforce an arbitration order on an unstamped agreement reinforces the rule.