How to file an MSME Samadhaan case for delayed payment

Who can file on MSME Samadhaan

MSME Samadhaan is the government portal for claims under Chapter V of the Micro, Small and Medium Enterprises Development Act, 2006 (the MSMED Act). You can file if all of these are true:

• You are the supplier and you are classified as a micro or small enterprise. Medium enterprises are not covered by the delayed-payment provisions.
• You have a Udyam registration number. The portal will not accept an application without it.
• You supplied goods or rendered services and the buyer has not paid within the period the Act allows.

The buyer can be anyone: a private company, a partnership, a proprietor, a public sector undertaking or a government department. There is no minimum claim amount in the Act.

Two points that often decide a case. First, courts have held that the benefit applies to supplies made after you registered, so register on Udyam before you take the order, not after the dispute starts. Second, retail and wholesale traders were allowed Udyam registration for priority sector lending only, so pure trading businesses are generally not able to use these delayed-payment provisions.

When a payment counts as delayed

Section 15 of the MSMED Act sets the deadline. The clock starts on the day the buyer accepts the goods or services (or is deemed to have accepted them, which is 15 days after delivery if no objection is raised in writing).

Documents to keep ready

• Udyam registration certificate and the mobile number linked to it
• Purchase order or work order
• Tax invoices for the unpaid amount
• Proof of delivery or acceptance: delivery challan, e-way bill, lorry receipt, signed receipt or completion certificate
• Ledger statement showing what was billed, what was paid and what is outstanding
• Emails, letters or WhatsApp messages where you asked for payment or the buyer admitted the dues
• Buyer details: legal name, address, GSTIN, email and phone

Steps to file the application

1. Send a written demand or an advocate's legal notice first. It is not compulsory, but many buyers pay at this stage and it strengthens your record. See what a legal notice for an unpaid invoice should include.
2. Go to the MSME Samadhaan portal (samadhaan.msme.gov.in) and choose the option to file an application as an entrepreneur.
3. Enter your Udyam registration number and verify it with the OTP sent to your registered mobile.
4. Fill in the buyer's details and each unpaid invoice: number, date, amount, amount received and balance.
5. Upload the purchase order, invoices and supporting documents, then submit. You get an application number to track the case.
6. The application is forwarded to the Micro and Small Enterprises Facilitation Council (MSEFC) for your location. The Council sends a notice to the buyer asking them to pay or reply.

What happens after you file

Under Section 18, the Council first tries conciliation: both sides are called to settle. If conciliation fails, the Council takes up the dispute for arbitration itself or refers it to an arbitration institution, and the result is an award that can be enforced like a court decree.

The Council that hears the case is the one where you, the supplier, are located, even if the buyer is in another state. This is one of the biggest practical advantages of the route.

The Act says a reference should be decided within 90 days. In practice timelines vary by state and by how busy the Council is, so plan for longer and follow up on hearings.

If the buyer wants to challenge the award in court, Section 19 requires them to first deposit 75% of the awarded amount. This discourages delay tactics.

Interest you can claim

Section 16 makes the buyer liable for compound interest, with monthly rests, at three times the bank rate notified by the Reserve Bank of India, from the day the payment became due. This applies even if your contract says something else. See how to calculate interest on delayed MSME payments.

Common mistakes that weaken a case

• Registering on Udyam only after the supply was made
• No proof that the goods or services were delivered and accepted
• Invoices that do not match the purchase order or the ledger
• Filing when there is a genuine quality dispute raised in writing by the buyer within time, without answering it
• Waiting too long: money claims generally have a three-year limitation period, so do not let old invoices sit

How FundRaksha Legal helps

A dedicated advocate checks your eligibility, sends the MSME Act notice within 24 hours of complete documents, negotiates with the buyer, and files and follows the Samadhaan case if the buyer still does not pay. There is no upfront fee; our fee is 30% of the amount actually recovered. See how it works or book a free consultation.

Frequently asked questions