Small businesses have two advantages: most are Udyam-registered micro or small enterprises with MSMED Act rights (45-day payment cap, interest at three times the RBI bank rate, MSME Samadhaan), and most claims are undisputed and settle on an advocate's notice. The free consultation checks your registration, proof and amount, and tells you whether to proceed; if you do, there is nothing to pay upfront and 30% on recovery.
Is a small claim worth pursuing?
Usually yes, because the first step costs nothing and usually works. An advocate's notice is sent within 24 hours of your documents, at no upfront cost, and most buyers pay or agree a schedule at that stage. Court fees arise only if a matter is filed, and the expert tells you the figure before you decide. The consultation gives you a straight answer on whether your particular amount and facts justify going further than the notice.
Your MSME rights, in plain terms
- If you hold a Udyam certificate as micro or small, the buyer must pay within the agreed period, capped at 45 days from acceptance, or 15 days if nothing was agreed
- Late payment carries interest at three times the RBI bank rate, compounded monthly, whether or not your invoice mentions interest
- You can file a claim on MSME Samadhaan to your state's Facilitation Council, which conciliates and arbitrates with a 90-day target
- The buyer cannot deduct the unpaid amount as an expense for income tax until it is paid (Section 43B(h))
If you are not yet registered on Udyam, the expert will explain the effect on past and future invoices.
Typical small business situations
| Situation | Usual route |
|---|---|
| Supplied goods to a local company; 3 months unpaid; no dispute | Advocate's notice with MSMED interest; pays in most cases |
| Service job done; client says "budget issue" | Notice; summary suit or Samadhaan if ignored |
| Buyer gave a cheque that bounced | Section 138 notice within 30 days |
| Many small customers, each owing a little | Structured reminders; notice for the largest; see collect.fundraksha.com |
Next steps
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.
See SME debt collection in Rajkot and in Madurai, the MSME interest calculator, and the MSME payment delay consultation. For businesses with many small customers, collect.fundraksha.com automates reminders at a 1% fee.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.