For a vendor payment that is not being released, the free consultation checks the vendor agreement and PO terms, the acceptance and certification records, any deductions or retention, and your MSME status. It then recommends the step: a formal statement with the missing documents, an advocate's notice to the paying authority, MSME Samadhaan, or arbitration or a summary suit. Nothing upfront; 30% on recovery.
Common reasons a vendor payment is held
- Vendor registration, bank mandate or KYC documents expired or incomplete
- Measurement, inspection or completion certificate not issued by the buyer's own engineer or manager
- Invoice mismatch with PO quantity, rate or GST details
- Deductions for liquidated damages, penalties or quality, applied without notice
- Retention money or security deposit held beyond the defect liability period
- Budget or fund release pending on the buyer's side
Some of these are yours to fix; most are the buyer's obligation. The consultation separates the two.
Government and PSU vendor payments
Government departments and PSUs are buyers under the MSMED Act like any other, so a registered micro or small vendor can claim interest at three times the RBI bank rate and file MSME Samadhaan against them. Government contracts also usually have their own dispute clauses and arbitration provisions, which the expert reviews. The notice is addressed to the drawing and disbursing officer and the head of the department. See the government supply page.
Private corporate vendors
For private buyers the vendor agreement governs. Check the payment clause, the acceptance procedure, the deduction and set-off rights, and the dispute clause. An advocate's notice to the finance head attaching the certification record and a clean statement usually releases the undisputed amount. Disputed deductions are contested on the record and, if needed, in arbitration or a summary suit. 60% of FundRaksha matters settle at the notice stage.
Documents and next steps
- 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
Also bring the vendor agreement or empanelment letter and any certificates issued by the buyer. 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.
City views: vendor payment collection in Bhubaneswar and in Raipur. Sector views: construction, solar and renewables, electronics.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.