As a supplier in India you can demand payment by legal notice, claim statutory interest and a Facilitation Council award under the MSMED Act if you are a registered micro or small enterprise, prosecute a bounced cheque under Section 138 of the NI Act, file a summary suit for a fixed sum, or arbitrate under your contract. The free consultation tells you which of these fit your invoice.
Your rights under the MSMED Act, 2006
If you are Udyam-registered as a micro or small enterprise, Sections 15 to 18 of the MSMED Act apply. The buyer must pay within the agreed period, which cannot exceed 45 days from acceptance, or within 15 days if no period is agreed. Delay attracts compound interest at three times the RBI bank rate, compounded monthly. You can file a claim on MSME Samadhaan; the Facilitation Council in your state conciliates and then arbitrates, aiming to decide within 90 days. A buyer who wants to appeal must deposit 75% of the award first.
Section 43B(h) of the Income-tax Act adds commercial pressure: a buyer cannot deduct a payment to a micro or small supplier as an expense until it is actually paid within the MSMED period.
Your rights if a cheque bounced: Section 138
A cheque returned for insufficient funds or a closed or stopped account is a criminal offence under Section 138 of the Negotiable Instruments Act. You must send a written demand within 30 days of receiving the bank's return memo; the drawer then has 15 days to pay; if they do not, a complaint must be filed within one month after that. Punishment can be imprisonment up to two years, a fine up to twice the cheque amount, or both. The deadlines are strict, so if you have a bounced cheque, book the consultation today.
Your rights under general law: notice, summary suit, arbitration
- Legal demand notice. Not required by statute for an ordinary invoice, but it puts the buyer on record, fixes the amount and interest claimed, and is the step that settles most matters.
- Summary suit (Order XXXVII CPC). For a fixed sum due on a written contract, invoice or bill of exchange. The buyer must get leave to defend; without a real defence, judgment follows quickly.
- Arbitration. If the purchase order or contract has an arbitration clause, the dispute goes to a tribunal and the award is enforced like a court decree.
- Limitation. All of these must be started within three years of the due date or last written acknowledgement.
How the free legal consultation works
You speak to a recovery expert by phone, WhatsApp or video, share the invoice and the buyer's replies, and get the rights above applied to your facts: which remedies are open, which is best, how long it takes, and the cost. 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.
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. For more, read customer not paying invoice and the MSME interest calculator.
The consultation is general guidance on your situation, not a formal legal opinion. A formal opinion and all legal work are given by the enrolled advocate once you engage FundRaksha Legal.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.