Client Not Paying? How MSMEs Can Recover Dues Through the MSME Samadhaan Portal

You delivered the goods, raised the invoice, and waited. Thirty days passed, then sixty, then ninety — and the buyer's payment is still "under process". For a small business, a stuck payment is not a minor irritation; it blocks salaries, raw-material purchases and the next order. What many MSME owners do not realise is that Indian law gives micro and small enterprises a dedicated, online remedy for exactly this problem: the MSME Samadhaan portal, backed by the MSMED Act, 2006.

This guide explains the payment timelines the law sets for your buyers, the interest you are entitled to on overdue amounts, who can file on the Samadhaan portal, the documents to keep ready, and the exact steps to file a delayed payment application.

The Short Answer

If you are a Udyam-registered micro or small enterprise, and a buyer has not paid you within the legal timeline, you can file a delayed payment application online on the MSME Samadhaan portal (samadhaan.msme.gov.in). Under the MSMED Act, a buyer must pay within 45 days of acceptance of goods or services where a written agreement exists — and within 15 days where there is no agreement. On the overdue amount, the buyer is liable to pay compound interest, compounded monthly, at three times the bank rate notified by the Reserve Bank of India (Section 16 of the MSMED Act). Your application is forwarded to your state's Micro and Small Enterprises Facilitation Council (MSEFC), which first attempts conciliation and can then move the matter to arbitration.

What the Law Says: Payment Timelines Under the MSMED Act

The MSMED Act does not leave payment terms entirely to negotiation. It fixes an outer limit that applies to every buyer of a micro or small enterprise's goods and services:

• Where a written agreement exists: the buyer must pay on or before the agreed date — and that agreed period cannot exceed 45 days from the day of acceptance (or deemed acceptance) of the goods or services.
• Where there is no agreement: the buyer must pay within 15 days of acceptance.
• A contract cannot override these limits. Even if your purchase order or agreement says "payment in 90 days", the clause cannot lawfully extend payment beyond the statutory ceiling.

The interest penalty: three times the RBI bank rate

The Act backs these timelines with a serious financial consequence. Under Section 16 of the MSMED Act, where a buyer fails to pay on time, the buyer is liable to pay compound interest with monthly rests, at three times the bank rate notified by the RBI, on the overdue amount. This is not a nominal penalty — for a large, long-overdue invoice, the interest component can become substantial, which is precisely why a formal filing often gets a buyer's attention. Note also that this interest liability applies regardless of what your contract says about interest; the statutory provision prevails.

Who Can File on the Samadhaan Portal — and Who Cannot

Eligibility is specific, and it is worth checking before you invest time in the application:

• Only micro and small enterprises can file. The Samadhaan remedy is reserved for micro and small suppliers of goods and services.
• You must be Udyam-registered. Only Udyam-registered micro and small enterprises can file on the portal. If your business is not registered yet, complete that free, paperless step first — our guide Udyam Registration — A Free Step-by-Step Guide for MSMEs walks you through it.
• Medium enterprises cannot use Samadhaan. If your enterprise is classified as medium, this particular route is not open to you; you would need to rely on your contract's remedies, arbitration clauses or civil recovery instead.
• The claim must relate to a genuine supply. The application concerns dues for goods supplied or services rendered to a buyer who accepted them and then delayed payment beyond the permitted period.

Before You File: Documents and Details to Keep Ready

A complete, well-documented application moves faster than a bare complaint. Based on the filing procedure, gather the following before you log in:

• Your Udyam Registration Number and the details of your enterprise as they appear on the certificate.
• Buyer details — the legal name of the buyer organisation, its address and contact information.
• The written agreement, purchase order or work order, if one exists, showing the agreed payment terms.
• Invoices or bills raised for the supplies in question, with numbers, dates and amounts.
• Proof of delivery and acceptance — delivery challans, goods receipt notes, installation or completion sign-offs, or email confirmations showing the buyer accepted the goods or services, and the date of acceptance. The acceptance date matters because the 45-day/15-day clock runs from it.
• A statement of the amount due — principal outstanding, any part-payments received, and the period of delay.
• Your payment follow-up trail — reminder emails, letters or messages showing you asked for payment before filing. Not strictly the core of the claim, but useful context for the council.

Step-by-Step: Filing a Delayed Payment Application on Samadhaan

Step 1: Open the portal and log in

Go to samadhaan.msme.gov.in and start the application process using your Udyam registration details. The portal is designed for the enterprise itself to file — you do not need to hire anyone to submit the application.

Step 2: Enter your enterprise's details

Fill in your enterprise information as the applicant — name, Udyam Registration Number, address and contact details — exactly as they appear on your Udyam certificate.

Step 3: Enter the buyer's details

Provide the respondent's details: the buyer organisation's name, address and contact information, matching your agreement or purchase order.

Step 4: Describe the case and the amount due

Enter the particulars of the supply — what was supplied, invoice numbers and dates, the date of acceptance, the due date under the agreement (or the statutory timeline), and the amount outstanding. Be precise and consistent with your documents; the figures in the application should match the invoices you upload.

Step 5: Upload the supporting documents

Attach the agreement or purchase order, invoices, proof of delivery and acceptance, and any other supporting records from your checklist. Clear, complete documentation strengthens your application from day one.

Step 6: Submit — the application goes to the Facilitation Council

Review everything and submit. The application is forwarded to the Micro and Small Enterprises Facilitation Council (MSEFC) of the state. You can track the status of your case through the portal as it progresses.

What Happens After You File

The MSEFC does not jump straight to a contested decision. The process is designed to try settlement first:

1. Conciliation first. The council first attempts conciliation — bringing both sides to an agreed settlement of the dues.
2. Arbitration if conciliation fails. If the buyer does not cooperate or conciliation does not produce a settlement, the council can take the matter up for arbitration and decide the claim, including the statutory interest on the overdue amount.

In practice, many buyers who ignored months of reminders respond once a formal application lands with the Facilitation Council — the combination of a statutory forum and interest compounding monthly at three times the RBI bank rate concentrates attention. Filing does not guarantee instant payment, but it converts a private chase into a formal legal process with real consequences for continued delay.

Practical Tips to Protect Your Cash Flow

• Complete Udyam registration before you supply. The Samadhaan route is only open to registered micro and small enterprises — registration is free, so there is no reason to leave this protection unused.
• Always work against a written purchase order or agreement, and keep the payment term within the statutory limits. A clause promising payment in 90 days cannot override the Act, but a clean written record makes your claim far easier to prove.
• Invoice immediately on delivery and obtain written acceptance — a signed challan, a goods receipt note, or even an email confirmation. The acceptance date starts the legal clock.
• Send reminders in writing. A documented trail of polite, dated reminders strengthens your position when the matter reaches the council.
• File while the trail is fresh. The longer dues age, the harder records are to assemble. Once the statutory period has passed and reminders have failed, use the portal rather than letting the amount sit indefinitely.

Frequently Asked Questions

Can a medium enterprise file on the MSME Samadhaan portal?

No. The Samadhaan delayed payment remedy is available only to micro and small enterprises. Medium enterprises must rely on other remedies, such as their contract terms, arbitration or civil recovery.

What interest can I claim on my overdue payment?

Under Section 16 of the MSMED Act, the buyer is liable to pay compound interest, compounded monthly (with monthly rests), at three times the bank rate notified by the Reserve Bank of India, on the amount overdue for the period of delay.

Do I need Udyam registration to file a Samadhaan application?

Yes. Only Udyam-registered micro and small enterprises can file on the portal. If you are not registered, complete the free Udyam registration first — our step-by-step Udyam guide on our blog covers the full process.

There was no written agreement with my buyer. Can I still file?

Yes. The MSMED Act covers this situation expressly: where there is no agreement, the buyer must pay within 15 days of acceptance of the goods or services. Keep whatever records you do have — invoices, delivery proof and communications — to establish the supply and its acceptance.

Sources

• IIFL Finance — "MSME Samadhaan Portal: How to File a Delayed Payment Complaint": https://www.iifl.com/blogs/other/msme-samadhaan-portal-how-to-file-delayed-payment-complaint
• IndiaFilings — "MSME Samadhaan Delayed Payments Portal India" (documents and filing procedure via samadhaan.msme.gov.in): https://www.indiafilings.com/learn/msme-samadhaan

Don't Let Dues Decide Your Growth

Delayed payments are a solvable problem when you know the remedy exists. Register on Udyam if you have not already, keep your paperwork tight, and use the Samadhaan portal when reminders stop working. The same discipline that protects your cash flow — clear documentation and a professional presence — also wins you better clients. At Ready Multi Service, we support small businesses across India with website design, development and digital services that help you look credible to the buyers you want. Explore our blog for more practical guides on running and growing an MSME.