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Free Consultation for Engineering, Fabrication and Component Suppliers

Engineering suppliers sell to OEMs, tier-1s and EPC contractors on long credit against purchase orders with detailed inspection and rejection terms. Payment is held for inspection reports, rejections raised late, tooling disputes and schedule changes. FundRaksha's free consultation is for job-shops, fabricators, foundries and component makers who want their POs paid in full and on time.

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Short answer

For engineering supplier dues the free consultation reviews the PO and its terms, drawings and specifications, inspection and test reports, GRNs or MRNs, rejection notes and their timing, and the ledger. Most engineering suppliers are Udyam-registered, so the route is usually an advocate's notice claiming principal plus MSMED Act interest, followed by MSME Samadhaan before the state Council if unpaid. Nothing upfront; 30% on recovery.

Where engineering payments get stuck

  • GRN or MRN delayed because the buyer's inspection is pending
  • Rejections raised weeks after receipt, after the goods have been used
  • Debit notes for rework, line stoppage or logistics without agreement
  • Tooling and development costs never covered by a PO
  • Schedule amendments that leave finished goods uninvoiced
  • Price revisions for raw material not approved retrospectively

The MSMED Act works especially well here

Under the MSMED Act, the "day of acceptance" is the day of delivery, unless the buyer objects in writing within the agreed period (which cannot exceed 15 days). A buyer who raises a rejection after that period has, in law, accepted the goods, and the 45-day clock has been running since delivery. Interest accrues at three times the RBI bank rate compounded monthly. This single rule disposes of most late-rejection arguments. Use the MSME interest calculator to see the figure, and see the engineering industry page.

Documents to bring

  1. Udyam certificate
  2. Purchase orders with terms, drawings and schedule amendments
  3. Invoices, challans, e-way bills and GRN or MRN copies
  4. Inspection and test reports; any rejection or debit notes with dates
  5. Correspondence on quality, rework and price revisions
  6. Ledger with payments received and their appropriation

Routes and next steps

For Udyam-registered units: advocate's notice claiming principal plus statutory interest, then MSME Samadhaan before your state's Council, which conciliates and arbitrates with a 90-day target; the buyer must deposit 75% of any award to appeal. For medium or unregistered suppliers: notice, then a summary suit on the PO and invoices or arbitration if the PO provides. Bounced cheques go under Section 138. If you decide to go ahead, a dedicated advocate is assigned within 24 hours of your complete documents and the legal notice goes out as an e-notice, followed by registered post. Nothing is charged upfront. If you proceed, FundRaksha Legal charges 30% only on the amount actually recovered; if nothing is recovered there is no success fee. Court fees, where a matter is filed, are borne by you and told to you in advance.

Engineering clusters: Pune, Coimbatore, Rajkot, Faridabad and Ludhiana. See also auto components and steel and metals.

Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.

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Free consultation and case assessment

मुफ़्त सलाह, कोई शुल्क नहीं

Talk to a FundRaksha recovery expert for free. In one call we assess your unpaid invoices and tell you honestly what can be recovered, how, and in roughly how long. No fee for the call, no obligation, and no upfront cost if you go ahead: our fee is a percentage of what we actually recover.

  • A review of your invoices, purchase orders, delivery proof and the buyer’s replies
  • An honest assessment of recovery chances and the right route: reminders, legal notice, MSME Samadhaan, Section 138 or a civil suit
  • A realistic timeline and the exact cost: nothing upfront, a success fee only on recovery
  • A dedicated advocate assigned within 24 hours if you decide to proceed
Keep these ready
  • The unpaid invoice(s) and payment terms
  • Purchase order, delivery challan, e-way bill or proof of service
  • Messages, emails or letters about the payment
  • For a bounced cheque: the cheque and the bank return memo

No recovery, no fee. Court fees, if any, are borne by the client and told upfront.

FAQ

Questions, answered

Not under the MSMED Act if you are a registered micro or small unit: a rejection raised after the inspection period is treated as acceptance. The notice sets this out and claims full payment with interest.

This page is general information for Indian businesses, not legal advice for your specific case. Laws, rates and procedures change; speak to an advocate before acting. FundRaksha LegalTech Pvt Ltd is a technology company; legal work is carried out by enrolled advocates.