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—practical-guides:msme-delayed-payment-samadhaan-complaint-interest-guide [2026/07/22 17:47] (current) – created - external edit 127.0.0.1
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 +{{htmlmetatags>metatag-title=(MSME Delayed Payment: Samadhaan Complaint & Interest Guide)&metatag-description=(MSME supplier not paid on time? File a Samadhaan complaint via the ODR Portal, claim compound interest under the MSMED Act, and recover what you are owed.)&metatag-keywords=(Business and Finance, complaint, delayed, guide, interest, msme, payment, samadhaan)&metatag-robots=(index,follow)&metatag-og:title=(MSME Delayed Payment: Samadhaan Complaint & Interest Guide)&metatag-og:description=(MSME supplier not paid on time? File a Samadhaan complaint via the ODR Portal, claim compound interest under the MSMED Act, and recover what you are owed.)&metatag-og:type=(article)}}
 +
 +====== MSME Delayed Payment: File a Samadhaan Complaint and Claim Your Interest ======
 +
 +**If you are a registered Micro or Small Enterprise and your buyer has not paid on time, the MSMED Act gives you the right to recover the principal plus compound interest — and the government's ODR Portal lets you file a complaint at no cost, without a lawyer, from your laptop.**
 +
 +{{:practical-guides:msme-delayed-payment-samadhaan-complaint-interest-guide.webp|MSME Delayed Payment: File a Samadhaan Complaint and Claim Your Interest}}
 +
 +**Reviewed on:** 2026-05-29.
 +
 +<WRAP center round info 95%>
 +**Quick Reply:**
 +
 +A Micro or Small Enterprise with a valid **Udyam Registration** that predates the disputed invoice can file a delayed payment complaint free of charge on the **MSME ODR Portal** ([[https://odr.msme.gov.in|odr.msme.gov.in]]). The claim goes first through online negotiation/mediation, then — if unresolved — to the state's **Micro and Small Enterprise Facilitation Council (MSEFC)** for conciliation and arbitration. The MSEFC must conclude within 90 days of reference. The MSMED Act entitles you to **compound interest with monthly rests** on the overdue amount, at the rate specified in Section 16 of the Act (linked to the RBI bank rate). An MSEFC award has the force of a court decree. If your buyer is a government department or PSU, you can additionally use an **RTI application** to uncover payment records and build your case.
 +</WRAP>
 +
 +===== Who this guide is for =====
 +
 +This guide is written for **owners and managers of Micro and Small Enterprises** who are owed money by a buyer — whether the buyer is a private company, a large corporation, a public sector undertaking, or a government department — and who want to recover payment without spending a lot on lawyers or court fees.
 +
 +You will benefit from this guide if:
 +
 +  * You have supplied goods or rendered services and the buyer has not paid by the due date.
 +  * You have a valid **Udyam Registration certificate** (or Udyog Aadhaar, if pre-dating the Udyam regime) and the registration was done //before// the invoices in dispute were raised.
 +  * Your enterprise qualifies as **Micro or Small** under the current investment and turnover thresholds defined in the MSMED Act. Note: Medium Enterprises cannot use the MSEFC route, but Micro and Small ones can.
 +  * The buyer is based or operates in India (foreign buyers are outside MSMED Act jurisdiction).
 +
 +If you are not yet registered on Udyam, stop here: register first at [[https://udyamregistration.gov.in|udyamregistration.gov.in]] (it is free), then come back. You cannot claim MSMED Act protections for invoices raised before your registration date.
 +
 +This guide complements our broader [[/apply-business-loan-msme-cgtmse-2026|MSME CGTMSE loan guide]] and our [[/consumer-court-how-to-file-india|consumer court filing guide]] for related dispute scenarios.
 +
 +===== What you can do this weekend =====
 +
 +==== Friday evening ====
 +
 +Pull together your paper trail. Open your email and accounting software and download every invoice related to the buyer, every purchase order or work order (even WhatsApp messages confirming an order count as secondary evidence), every delivery challan, and every reminder you have sent. Save them all into a single folder on your computer. Also locate your **Udyam Registration certificate** — you will need the Udyam number to log in to the ODR Portal. If you do not have the certificate handy, download it from [[https://udyamregistration.gov.in|udyamregistration.gov.in]] using your registered mobile number.
 +
 +Check whether the buyer has sent any written objection to the invoices or delivery. If they have not objected in writing within 15 days of delivery, the law treats acceptance as "deemed" — and the clock for the payment deadline runs from the day of delivery itself.
 +
 +==== Saturday ====
 +
 +Draft and send a **formal demand email** (use the template in this guide below). The email should state the invoice numbers, total outstanding amount, the original due date, and invoke the MSMED Act. Send it from your official business email to the buyer's accounts payable department and copy the buyer's senior management. This is not a legal requirement before filing, but it often prompts faster payment and creates a clean paper trail for the MSEFC.
 +
 +While you wait for a reply, calculate the overdue interest. Under Section 16 of the MSMED Act, the rate is compound interest with monthly rests at **three times the RBI bank rate**. The RBI bank rate changes periodically — check the current rate at [[https://www.rbi.org.in|rbi.org.in]] before computing. Use the applicable rate(s) for each month in the delay period. //(Example, for illustration only: if the RBI bank rate during the delay period was 6.5%, the applicable interest rate under the Act would be 19.5% per annum, compounded monthly. Label any figures you present to the MSEFC clearly as an estimate, and always verify the current RBI rate.)//
 +
 +Also check the **payment timeline** applicable to your transaction. Under Section 15 of the MSMED Act:
 +
 +  * If there is //no written agreement// on credit period: the buyer must pay before the "appointed day" — which is the day immediately after 15 days from acceptance or deemed acceptance of goods/services.
 +  * If there is a //written credit agreement//: the buyer must pay on or before the agreed date, but that agreed period **cannot exceed 45 days** from the day of acceptance or deemed acceptance.
 +
 +==== Sunday ====
 +
 +Register on the **MSME ODR Portal** ([[https://odr.msme.gov.in|odr.msme.gov.in]]). Create an account using your Udyam number and mobile number. Explore the claim form so you know exactly what information you will need to enter. Combine all your supporting documents into PDF files (multiple invoices can go into one PDF). You are now ready to file the complaint on Monday morning — or even finish filing on Sunday if you have everything ready.
 +
 +===== Documents and evidence checklist =====
 +
 +^ Document ^ Why it matters ^ What if missing? ^
 +| **Udyam Registration Certificate** | Proves you are a Micro/Small Enterprise; mandatory for eligibility. The registration date must predate the disputed invoice. | Register free at udyamregistration.gov.in before filing — without this, the portal will not accept your claim. |
 +| **Purchase Order / Work Order** | Establishes the agreed scope, price, and delivery terms. | If the PO was verbal, you must submit a signed affidavit to that effect. Acknowledgements on invoices, delivery challans, or part-payment receipts are also accepted as secondary evidence. |
 +| **Tax Invoices** | Core claim documents — show amount owed, invoice date, GST, and HSN/SAC code. | Combine all disputed invoices into a single PDF. Ensure each invoice shows your GSTIN and the buyer's GSTIN. |
 +| **Delivery Challans / Service Completion Proof** | Establishes the date goods were delivered or service was rendered — this is the starting point for the payment clock. | Use e-way bill copies, signed delivery receipts, courier tracking printouts, or email confirmations of service delivery. |
 +| **Buyer's Written Acceptance (or absence of objection)** | If the buyer sent no written objection within 15 days of delivery, "deemed acceptance" applies and strengthens your timeline. | Print or screenshot all email threads. If the buyer acknowledged receipt anywhere — even in a WhatsApp message — save it. |
 +| **Payment Correspondence** | Reminder emails, payment request letters, and any partial payment receipts show good-faith efforts and establish the dispute timeline. | Even one-line reminder emails count. Export them as PDFs. |
 +| **Bank Statement** | Shows what has and has not been credited — confirms the outstanding amount. | A 3-month bank statement covering the invoice period is sufficient. Optional but strongly recommended. |
 +| **Interest Calculation Sheet** | Shows the buyer and the MSEFC the compound interest accruing under Section 16, so the council can verify your total claim amount. | Prepare a simple spreadsheet: invoice date, due date, overdue days, principal, applicable RBI bank rate during each month, and interest computed. Label it clearly as an estimate pending final RBI rate verification. |
 +| **Legal Notice (if already sent)** | Not mandatory, but if you sent one, include a copy — it shows the buyer was formally notified. | Not required. You can file without it. |
 +
 +===== Step-by-step action plan =====
 +
 +==== Step 1 — Verify your Udyam status ====
 +
 +Log in to [[https://udyamregistration.gov.in|udyamregistration.gov.in]] and confirm your Udyam Registration number and certificate are active. Check that the registration date is //earlier// than all the invoice dates in your claim. If you registered under the older Udyog Aadhaar system and have not migrated, do so now — the ODR Portal requires a Udyam number.
 +
 +==== Step 2 — Calculate what you are owed ====
 +
 +Total up the outstanding principal across all disputed invoices. Then prepare an interest estimate. The MSMED Act (Section 16) provides for compound interest with monthly rests at three times the RBI bank rate, running from the appointed day or agreed due date. Look up the current RBI bank rate at [[https://www.rbi.org.in|rbi.org.in]]. If the delay spans multiple rate-change periods, apply the rate applicable in each month separately. **Keep your working transparent and label it as an estimate** — the MSEFC will do a final calculation.
 +
 +==== Step 3 — Send a formal demand notice to the buyer ====
 +
 +Before filing, send a written demand (email is sufficient) to the buyer's accounts team and senior management. State the invoice details, the MSMED Act provision, the interest accruing, and a deadline — typically 7 to 15 days — for payment. Sending this notice is not a legal prerequisite but it frequently resolves matters quickly and, if it does not, it strengthens your case. Use the copy-paste template in this guide below.
 +
 +==== Step 4 — File on the MSME ODR Portal ====
 +
 +Go to [[https://odr.msme.gov.in|odr.msme.gov.in]] and create an account with your Udyam number and registered mobile. Fill in the guided digital claim form:
 +
 +  * Your enterprise name, Udyam number, category (Micro/Small), PAN, GSTIN, address, email, and mobile.
 +  * Buyer's full name, address, GSTIN, email, phone, and buyer category (private company / public sector / government).
 +  * Invoice details: dates, amounts, and due dates for each invoice.
 +  * Total outstanding principal and your interest estimate.
 +  * Upload all supporting documents in PDF format (you can combine multiple invoices into one PDF).
 +
 +Filing is **free of charge**. No court fee, no stamp duty, no lawyer required at this stage.
 +
 +==== Step 5 — Engage in Tier-1 pre-MSEFC resolution ====
 +
 +Once filed, the ODR Portal electronically notifies the buyer. The portal may facilitate structured digital negotiation — offers and counter-offers — or assign a mediator for virtual sessions. This Tier-1 stage is //voluntary//: either party may opt out. If the buyer pays or a settlement is reached here, the matter is closed. If not — or if the buyer ignores the process — the dispute automatically escalates to Tier-2.
 +
 +==== Step 6 — MSEFC proceedings (Tier-2) ====
 +
 +Your claim is referred to the state's **Micro and Small Enterprise Facilitation Council**. The MSEFC first attempts conciliation between the parties. If conciliation fails, the Council itself arbitrates the dispute. The **MSEFC must conclude proceedings within 90 days** of the reference date. The buyer cannot stay proceedings by filing a counter-case in a civil court during this period (subject to Supreme Court rulings on jurisdiction). Attend or appear virtually before the MSEFC on scheduled dates — failure to appear may weaken your case.
 +
 +==== Step 7 — Receive and enforce the award ====
 +
 +If the MSEFC rules in your favour, it issues an **award** directing the buyer to pay the principal plus compound interest under Section 16. The award bears the official seal and has **the same legal force as a decree of a civil court**. If the buyer still does not pay, file an **execution petition** in the competent civil court in the buyer's jurisdiction. The court can then attach and sell the buyer's assets to satisfy the decree.
 +
 +==== Step 8 — Parallel track: Income Tax Act Section 43B(h) leverage ====
 +
 +If your buyer is a company that files income tax returns, note that **Section 43B(h) of the Income Tax Act** disallows deduction of payments to MSME suppliers that exceed the prescribed timeline. This means delayed payment to you costs the buyer extra tax. You can legitimately inform the buyer of this in your demand notice — it often accelerates payment without any formal complaint.
 +
 +===== Escalation ladder =====
 +
 +^ Stage ^ Action ^ Forum / Platform ^ Cost ^ Typical timeline ^
 +| **1. Demand Notice** | Send formal written demand citing MSMED Act and interest accruing | Email / registered post to buyer | Nil | Give buyer 7–15 days to respond |
 +| **2. ODR Portal Filing** | File digital claim with all documents on the MSME ODR Portal | [[https://odr.msme.gov.in|odr.msme.gov.in]] | Free | Immediate on filing; buyer notified electronically |
 +| **3. Tier-1 Negotiation / Mediation** | Online structured negotiation or mediator-assisted session | ODR Portal facilitated | Free | Voluntary; duration varies |
 +| **4. MSEFC Reference (Tier-2)** | State Facilitation Council — conciliation, then arbitration | State MSEFC (via ODR Portal) | Free | Must conclude within 90 days of reference |
 +| **5. MSEFC Award** | Award issued for principal + compound interest under Section 16 | MSEFC | Free | Part of the 90-day MSEFC period |
 +| **6. Civil Court Execution** | File execution petition if buyer ignores MSEFC award | Competent civil court | Court fee applies | Varies by court; can seek urgent relief |
 +| **Parallel: RTI Application** | If buyer is a government dept. / PSU — file RTI to get payment records, sanctioned bills, and internal notes | [[/file-rti-online-india|rtionline.gov.in]] | ₹10 | 30 days for first response |
 +
 +===== Copy-paste complaint template =====
 +
 +Replace the text in square brackets with your own details before sending.
 +
 +Subject: Formal Demand for Payment Under MSMED Act 2006 — Invoices [LIST INVOICE NUMBERS]
 +
 +Date: [DATE]
 +
 +To,
 +The Accounts Payable Department / Managing Director
 +[BUYER COMPANY NAME]
 +[BUYER ADDRESS]
 +[BUYER EMAIL]
 +
 +Dear Sir / Madam,
 +
 +This is a formal demand notice under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
 +
 +I / We, [YOUR ENTERPRISE NAME], are a [Micro / Small] Enterprise registered under the MSMED Act with Udyam Registration Number [YOUR UDYAM NUMBER].
 +
 +We supplied [goods / services — brief description] to your organisation under Purchase Order No. [PO NUMBER] dated [PO DATE]. We raised the following invoices, which remain unpaid as on the date of this notice:
 +
 +Invoice No. [INVOICE 1] dated [DATE] for Rs. [AMOUNT]
 +Invoice No. [INVOICE 2] dated [DATE] for Rs. [AMOUNT]
 +[Add more rows as needed]
 +
 +Total outstanding principal: Rs. [TOTAL AMOUNT]
 +
 +Under Section 15 of the MSMED Act, payment was due on or before [DUE DATE]. As of today, the payment is overdue by [NUMBER] days.
 +
 +Under Section 16 of the MSMED Act, compound interest at three times the RBI bank rate is running on the outstanding amount from the due date. We reserve the right to claim this interest in full.
 +
 +We also draw your attention to Section 43B(h) of the Income Tax Act, which disallows deduction for payments to MSME suppliers made beyond the prescribed period. Delayed payment to us will have income tax consequences for your organisation.
 +
 +You are requested to clear the outstanding amount of Rs. [TOTAL AMOUNT] along with applicable interest within [7 / 15] days of receipt of this notice, failing which we will be constrained to file a formal complaint on the MSME ODR Portal (odr.msme.gov.in) for reference to the Micro and Small Enterprise Facilitation Council.
 +
 +Please confirm receipt of this notice by return email.
 +
 +Yours faithfully,
 +[YOUR NAME]
 +[YOUR DESIGNATION]
 +[YOUR ENTERPRISE NAME]
 +[YOUR UDYAM NUMBER]
 +[YOUR EMAIL AND PHONE]
 +
 +===== When RTI can help =====
 +
 +RTI under the Right to Information Act, 2005 is a powerful tool — but **only when your buyer is a public authority**. Public authorities include central and state government departments, public sector undertakings (PSUs), municipal bodies, government universities, and any entity substantially financed by the government.
 +
 +If your buyer is a government department, PSU, or other public authority that has not paid your invoices, you can file an RTI application to:
 +
 +  * Obtain a copy of the **purchase order or work order** sanctioned for your supply — useful if the buyer disputes the terms.
 +  * Get copies of the **bills passed or payment sanctioned** in internal records — this can reveal if payment was approved internally but not released to you.
 +  * Trace any **budget allocation, utilisation, or lapse** that explains why payment was not made — useful for your MSEFC proceedings.
 +  * Find out the **name and designation of the officer** responsible for processing your payment, so you can address escalation to the right person.
 +  * Get copies of any **inspection notes or acceptance certificates** internally generated — these can defeat a buyer's claim that goods were not accepted.
 +
 +File your RTI application online at [[/file-rti-online-india|rtionline.gov.in]] for central government departments. For state government departments and PSUs, use the respective state RTI portal. The application fee is ₹10 (waived for BPL card holders). You will receive a response within 30 days. If not satisfied, file a [[/file-first-appeal-rti-section-19-2026|first appeal under Section 19]]. Our guide on [[/cpgrams-rti|CPGRAMS and RTI]] covers related escalation for government grievances.
 +
 +===== When RTI will not help =====
 +
 +RTI **does not apply to private companies**. If your buyer is a private limited company, a partnership firm, an LLP, a proprietorship, or a foreign company, RTI cannot compel them to disclose payment records or internal documents. The MSME ODR Portal / MSEFC route and civil courts are your remedies in those cases.
 +
 +Even for public authority buyers, RTI gives you //information// — it does not directly compel payment or award interest. Use RTI to build your evidence for the MSEFC, not as a substitute for the MSEFC process. Our guide on [[/consumer-court-how-to-file-india|filing in the consumer forum]] may also be relevant if the dispute involves a service transaction with a consumer angle.
 +
 +===== Common mistakes to avoid =====
 +
 +  * **Registering on Udyam after raising invoices.** The Supreme Court has held that MSMED Act protections are not retrospective. If your Udyam registration date is later than the invoice date, those invoices are outside the Act's protection. Register early — even before you raise your first invoice to a new buyer.
 +  * **Filing on the old Samadhaan portal.** From 15 October 2025, new complaints must go on the MSME ODR Portal ([[https://odr.msme.gov.in|odr.msme.gov.in]]). The Samadhaan portal (samadhaan.msme.gov.in) no longer accepts new filings — it is for tracking existing cases only.
 +  * **No purchase order and no affidavit.** The portal requires a purchase order or work order. If yours was verbal, you must submit a signed affidavit. Do not skip this — the MSEFC will need to establish the existence and terms of the contract.
 +  * **Claiming a specific interest rate without verifying the current RBI bank rate.** The interest rate under Section 16 is linked to the RBI bank rate, which changes. Always check the rate at [[https://www.rbi.org.in|rbi.org.in]] before computing, and clearly label your estimate as such in your MSEFC submission.
 +  * **Waiting too long.** Interest on delayed payment keeps accruing in your favour, so there is a financial reason to file early. More importantly, memories fade, documents get lost, and buyers may become insolvent. Do not wait months before acting.
 +  * **Ignoring the Tier-1 negotiation stage.** Some suppliers view the pre-MSEFC negotiation as a formality to skip. However, a settlement at this stage is faster than an MSEFC award and costs nothing. Engage genuinely — you can always opt out and proceed to MSEFC if the offer is unreasonable.
 +  * **Sending invoices without delivery proof.** Invoices alone do not prove delivery. Always obtain a signed delivery challan, a service completion certificate, or at minimum an email acknowledgement from the buyer confirming receipt. Without delivery proof, the buyer can claim "deemed acceptance" was never triggered.
 +  * **Assuming a Medium Enterprise can use MSEFC.** Only Micro and Small Enterprises can file before MSEFC. If your turnover or investment now puts you in the Medium category, the MSEFC route is unavailable — consult a lawyer about civil recovery options.
 +
 +===== Official links =====
 +
 +  * [[https://odr.msme.gov.in|MSME ODR Portal — File new delayed payment complaints (odr.msme.gov.in)]]
 +  * [[https://samadhaan.msme.gov.in|MSME Samadhaan — Track existing cases and view MSEFC directories (samadhaan.msme.gov.in)]]
 +  * [[https://udyamregistration.gov.in|Udyam Registration Portal — Free MSME registration (udyamregistration.gov.in)]]
 +  * [[https://msme.gov.in|Ministry of Micro, Small & Medium Enterprises — Policy and scheme information (msme.gov.in)]]
 +  * [[https://www.rbi.org.in|Reserve Bank of India — Current bank rate for interest calculation (rbi.org.in)]]
 +
 +===== Frequently asked questions =====
 +
 +==== Do I need a Udyam Registration to file a delayed payment complaint? ====
 +
 +Yes. Udyam Registration is mandatory. The Supreme Court has held that the registration must predate the disputed invoice — you cannot claim MSMED Act protection for invoices raised before your registration date. Register free at udyamregistration.gov.in before filing.
 +
 +==== How long does a buyer legally have to pay an MSME supplier? ====
 +
 +Under Section 15 of the MSMED Act, if there is no written agreement, the buyer must pay before the appointed day — which falls 16 days after delivery or deemed acceptance of goods or services. If there is a written credit period, it cannot exceed 45 days from acceptance or deemed acceptance. Deemed acceptance occurs when the buyer raises no written objection within 15 days of delivery.
 +
 +==== What interest can I claim on an overdue MSME payment? ====
 +
 +Section 16 of the MSMED Act provides for compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India. This applies from the appointed day or the agreed due date, whichever is applicable. The RBI bank rate changes from time to time, so compute interest using the rate(s) applicable during the delay period. Verify the current RBI bank rate at rbi.org.in before calculating.
 +
 +==== Where do I file a new delayed payment complaint after October 2025? ====
 +
 +From 15 October 2025, all new delayed payment complaints must be filed on the MSME ODR Portal at odr.msme.gov.in. The older Samadhaan portal (samadhaan.msme.gov.in) no longer accepts new filings but remains accessible for tracking existing cases.
 +
 +==== Is a legal notice mandatory before filing on the ODR Portal? ====
 +
 +No. A prior legal notice to the buyer is not a prerequisite for filing on the MSME ODR Portal or for a reference to the MSEFC. However, sending a formal demand email or notice before filing is good practice: it creates a paper trail, sometimes prompts payment without further escalation, and strengthens your case if you do proceed.
 +
 +==== What happens if the buyer ignores the MSEFC award? ====
 +
 +An MSEFC award has the same force as a decree of a civil court. If the buyer does not comply, you can file an execution petition before the competent civil court in the buyer's jurisdiction to enforce recovery, including attachment and sale of the buyer's assets.
 +
 +==== Can I use RTI to recover money from a private company that owes me payment? ====
 +
 +No. RTI applies only to public authorities — government departments, PSUs, and bodies substantially financed by government. If your buyer is a private company, your remedies are the MSME ODR Portal / MSEFC and civil courts. RTI is useful only when the delayed payer is a government department, public sector undertaking, or municipality.
 +
 +{{tag>msme delayed payment file samadhaan complaint claim interest}}