MSME Delayed Payment Claims

Recover overdue payments — with statutory interest — under the MSMED Act, 2006, through the Government of India's MSME Samadhaan and Online Dispute Resolution (ODR) portal.

What It Is

Get paid what you're owed.

If a buyer has not paid a Micro or Small Enterprise within the time allowed by law, the MSMED Act, 2006 gives the supplier a fast, low-cost statutory remedy — a reference to the Micro & Small Enterprise Facilitation Council (MSEFC).

The MSME Samadhaan portal and the newer ODR (Online Dispute Resolution) portal let enterprises file and pursue these claims entirely online — conciliation, mediation and arbitration from the comfort of their office, without the delay and cost of a civil suit.

Legalix helps you assemble the documents, file correctly, and represent you through conciliation, arbitration and enforcement of the award.

Who Can File

  • Registered under Udyam (valid Udyam Registration number)
  • A Micro or Small enterprise (Medium enterprises are excluded)
  • Supplied goods or services under a valid order or contract
  • Payment delayed beyond the agreed date, or 45 days from acceptance

Your Legal Entitlements

What the MSMED Act, 2006 guarantees

The Act puts the law firmly on the side of the small supplier.

45 days

Section 15 — Time to pay

The buyer must pay by the agreed date, or within 45 days of accepting the goods or services if no date is agreed.

3× bank rate

Section 16 — Statutory interest

On delay, the buyer owes compound interest (monthly rests) at three times the RBI-notified bank rate — regardless of any contract term.

90 days

Sections 17–18 — MSEFC decision

The Facilitation Council must endeavour to decide the reference within 90 days, acting as conciliator and then as arbitrator.

Good to know: Interest paid on delayed MSME payments is not deductible for the buyer under the Income-tax Act, and any appeal by the buyer against an MSEFC award generally requires depositing 75% of the amount — strong pressure to settle early.

The Process

How an MSME claim moves on the ODR portal

From registration to a binding award and its enforcement — step by step.

1

Register on the portal

Create an account on the MSME ODR / Samadhaan portal using your Udyam Registration number, mobile and email. The portal verifies your Udyam details and opens your filing dashboard.

2

File a new dispute

Select "File New Dispute" and enter the buyer's name and address, the contract or order value, dates of supply, and the nature of goods or services provided.

3

Upload your evidence

Attach invoices, purchase or work orders, proof of delivery, payment reminders and correspondence, and set out the principal amount due and the interest claimed.

4

e-Sign and get a case number

Verify the application with Aadhaar-based e-sign. The portal issues a unique case / diary number so you can track the matter online at every stage.

5

Pre-MSEFC online resolution

The buyer is notified electronically and both sides are invited into structured online negotiation and mediation by an empanelled neutral — the ODR layer designed to settle disputes quickly.

Conciliation / Mediation
6

Reference to the MSEFC

If it isn't settled, the matter goes to the Micro & Small Enterprise Facilitation Council, which first conciliates and, failing that, takes up arbitration under the MSMED Act.

Arbitration
7

Award & recovery

The Council directs the buyer to pay the principal with statutory interest — targeted within 90 days. If unpaid, the award is enforced like a decree of a court.

How Legalix Helps

End-to-end support for your claim

Claim assessment

We check eligibility, compute the interest due, and build the documentary record.

Filing & drafting

Accurate filing on the ODR / Samadhaan portal with a clear, persuasive statement of claim.

Representation

Advocacy through conciliation, mediation and arbitration before the MSEFC.

Enforcement

Execution of the award and recovery action where the buyer still fails to pay.

Owed money by a buyer? Start your MSME claim.

Send us your invoices and order details and we'll assess your delayed-payment claim and the interest you can recover.

Talk to Legalix