Who can file
You can file if:
- your business is a micro or small enterprise registered on Udyam (the MSMED Act calls you a “supplier”, section 2(n)); and
- a buyer owes you for goods you supplied or services you gave.
The buyer can be anyone who bought from you: a company, a shop, a government department or a public sector enterprise. Under section 18(4), the council for your area can hear a case against a buyer located anywhere in India.
These cannot use this route:
- Medium enterprises. The delayed payment chapter of the Act covers only micro and small enterprises.
- Wholesale and retail traders. Traders can register on Udyam, but the Ministry of MSME has said that this registration gives them priority sector lending only, and the Act’s delayed payment provisions do not apply to them (memorandum of 1 September 2021).
Register before you supply. In Silpi Industries (2021) the Supreme Court held that a seller must be registered on the date of the contract to claim the Act’s benefits, so bills for supplies made before you registered may not qualify. If yours are older, ask a lawyer before you file.
What counts as a delayed payment
Section 15 of the Act sets the deadline:
- With a written agreement on payment days: the agreed date, but never more than 45 days after the buyer accepted the goods or service.
- With no written agreement: 15 days after acceptance.
Acceptance is normally the day of delivery or of the service. If the buyer objects in writing within 15 days of delivery, acceptance is the day you resolve that objection. A payment after the deadline is delayed, and interest runs from the next day. Check a bill on the 45-day rule checker.
Where to file
The Ministry of MSME launched the MSME ODR portal in June 2025. Since 15 October 2025, new delayed payment cases are filed there. The older MSME Samadhaan portal no longer takes new applications and points you to the ODR portal; cases filed on Samadhaan before that date continue, and are being moved to the ODR portal.
The ministry describes the portal as a low-cost route. Confirm any fee on the portal when you file.
Documents to keep ready
- every unpaid invoice, with its date and amount;
- the purchase order or written agreement, especially if it sets payment days;
- delivery proof: signed challans, e-way bills, transport receipts, or the buyer’s sign-off for a service;
- your Udyam registration certificate;
- the customer’s ledger (statement of account), with payments and credit notes;
- your reminders and the buyer’s replies, including any balance they confirmed;
- the buyer’s full name, address and GST number.
How a case moves
- Online negotiation. Before a case reaches the council, the portal gives you and the buyer a chance to settle directly.
- Conciliation. If that fails, the Micro and Small Enterprises Facilitation Council (MSEFC) for your area tries to bring both sides to a settlement, itself or through a dispute resolution centre (section 18(2)).
- Arbitration. If conciliation fails, the council arbitrates or sends the case to an arbitration centre, which decides it (section 18(3)). Both stages can run online through the portal.
- The 90-day target. The Act says each reference should be decided within 90 days of being made (section 18(5)). Treat that as the law’s target, not a promise.
If the buyer wants a court to set aside the council’s award, they must first deposit 75% of the amount awarded (section 19).
The interest you can claim
Under section 16, a buyer who pays late owes compound interest with monthly rests at three times the bank rate notified by the RBI, from the day after the deadline, whatever your agreement says. Section 17 makes the buyer liable for the amount together with that interest.
Work out the figure for each bill on the MSME interest calculator, and keep the working with your claim.
Changes passed in 2026
Parliament passed the MSMED (Amendment) Bill in August 2026. Among other changes, it sets time limits for each stage: 90 days for mediation, 30 days to send a failed mediation to arbitration, and 90 days after the pleadings close for the award. The changes start on dates the central government notifies, so check the ODR portal for the steps that apply when you file.
Before filing, try the simpler steps in Customer not paying? What to do: they cost less and are easier on the relationship.