MSME Samadhaan: How to File a Delayed Payment Case and Actually Get Paid

If a buyer is sitting on your invoice for months, you are not just waiting for money. You are funding their business with yours. For micro and small enterprises in India, Parliament saw this problem coming. The Micro, Small and Medium Enterprises Development Act, 2006 (the MSMED Act) gives you a dedicated, time-bound route to recover delayed payments, and the MSME Samadhaan portal is how you use it.

This guide explains, in plain language, who can use it, what you are entitled to, and how to file a case that stands up.

What the law guarantees you

Three sections of the MSMED Act do the heavy lifting:

• Section 15, the 45-day rule. A buyer must pay a micro or small supplier on or before the date agreed in writing. That agreed period cannot exceed 45 days from the day the goods or services are accepted (or deemed accepted). If there is no written agreement, the buyer must pay within 15 days.
• Section 16, interest on delay. If the buyer pays late, they owe compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India, from the date the payment was due. This applies regardless of anything written in the purchase order.
• Section 18, a dedicated forum. Either party can refer a dispute about these amounts to the Micro and Small Enterprises Facilitation Council (MSEFC) of the state. The Council must decide the reference within 90 days of receiving it.

There is also a strong deterrent for the buyer. Under Section 19, a buyer who wants to challenge the Council's award in court must first deposit 75% of the awarded amount. That single rule is why many buyers settle once a case is filed.

Who can file

You can file if all of the following are true:

1. You are a micro or small enterprise (medium enterprises are not covered by the delayed-payment chapter of the Act).
2. You hold a valid Udyam registration.
3. You supplied goods or services and the buyer has not paid within the period described above.

A point that trips many suppliers: your Udyam registration should be in place when you entered into the contract or made the supply. Courts have held that claims for supplies made before registration may not be maintainable under the Act. If you are not yet registered, register now so that future supplies are protected.

Buyers can be companies, firms, proprietorships or government departments, anywhere in India.

Documents to keep ready

A well-documented case moves faster. Collect:

• Your Udyam registration certificate
• Purchase orders, agreements or email confirmations of the order
• Tax invoices raised on the buyer
• Proof of delivery: delivery challans, e-way bills, LR copies or signed acknowledgements
• Your ledger for the buyer, showing amounts outstanding
• Correspondence about payment: reminders, promises to pay, WhatsApp messages and emails
• Details of any part payments received

Tip: calculate the principal outstanding invoice by invoice, with the due date of each. The Council will look at each invoice's delay separately when it computes interest.

Filing on the MSME Samadhaan portal, step by step

1. Go to the portal at samadhaan.msme.gov.in and choose to file an application as a micro or small enterprise.
2. Enter your Udyam number. Your enterprise details are fetched from the registration.
3. Add the buyer's details: legal name, address, GSTIN or PAN, and the contact person.
4. List each unpaid invoice with its date, amount and the date the goods or services were accepted.
5. Upload your documents from the checklist above.
6. Submit. The application is forwarded to the Facilitation Council of the relevant state, and you receive an application number to track it.

What happens after you file

• Notice to the buyer. The Council (through the portal and by post) notifies the buyer of your application. Many buyers pay at this stage simply because the matter is now formal.
• Conciliation. The Council first tries to settle the dispute, either itself or through an institution offering alternative dispute resolution.
• Arbitration. If conciliation fails, the Council takes up the matter as an arbitrator, or refers it to an arbitration institution. The result is an award that is binding and enforceable like a court decree.
• Enforcement. If the buyer still does not pay, the award can be enforced through the courts. And if the buyer wants to challenge it, the 75% pre-deposit rule applies.

In practice, timelines vary from state to state and with how actively each side participates. Filing a complete, well-documented application is the single biggest thing you control.

Mistakes that weaken a case

• No written proof of acceptance. If you cannot show when the goods or services were accepted, the due date becomes arguable.
• Mixing disputed and undisputed invoices. If the buyer has raised a genuine quality dispute on one lot, keep that separate and file for the undisputed amounts.
• Waiting too long. Limitation still applies to money claims. Act while the evidence is fresh and well within three years of the amounts falling due.
• Ignoring the relationship. A polite reminder and a formal legal notice often work before a Samadhaan filing. Use the filing when those fail, not as the first message.

Where FundRaksha helps

Filing is only one part of recovery. With FundRaksha Collect, overdue invoices are chased automatically with reminders over WhatsApp, SMS and email. If a buyer still does not pay, FundRaksha Legal reviews your documents, sends a lawyer-reviewed notice and prepares your MSME Samadhaan filing. There is no upfront fee: we charge a 30% success fee only on the amount recovered. Court fees, if a matter goes to court, are borne by the client.

Before you extend credit to a new buyer, you can also check their GST record and history on FundRaksha Trust.

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This article is general information for Indian micro and small enterprises and is not legal advice for your specific situation. Laws and procedures can change; check the current position or speak to our team before acting.