Legal information notice: this article provides general information and isn't a substitute for advice from a qualified lawyer.
You delivered the goods, completed the service, raised the invoice — and now the client or vendor keeps stalling on payment, past every follow-up email and phone call. This is a different situation from a personal loan to a friend gone unpaid (see our separate guide on recovering money someone owes you personally for that scenario); business-to-business payment disputes have their own, often faster, legal toolkit. Here’s how to use it.
If your business is registered as a Micro or Small Enterprise, the Micro, Small and Medium Enterprises Development Act, 2006 works strongly in your favour. Under Sections 15-17, a buyer must pay you within 45 days of accepting goods or services (or a shorter period if agreed) — and delayed payment attracts compound interest at three times the RBI bank rate, running from the day after payment was due, not from whenever you eventually file a claim. As of 15 October 2025, new delayed-payment complaints are filed on the MSME ODR Portal — the older Samadhaan portal now only tracks existing cases and no longer accepts new filings, so make sure you’re using the current portal.
Where the payment came as a post-dated or immediate cheque that bounced, Section 138 of the Negotiable Instruments Act, 1881 gives you a specific, fast-moving criminal remedy alongside recovery of the amount: obtain the bank’s dishonour memo, send a legal demand notice within 30 days of that memo, and if payment isn’t made within 15 days of the notice, file a complaint within the following 30 days. Courts can also order interim compensation of up to 20% of the cheque amount during the trial itself, so you’re not left waiting for a final verdict to see any money.
A clear, dated written demand — referencing the invoice, the amount, and a specific payment deadline — is your starting evidence for every route that follows, and often prompts payment on its own from a debtor who was simply hoping you wouldn’t formally pursue it.
Registered MSME with a buyer who’s delayed payment past 45 days, a bounced cheque, or neither — the route that fits your facts determines everything that follows, so get this right before filing anywhere.
For MSME delayed payments, file on the MSME ODR Portal, where the Facilitation Council is required to adjudicate within 90 days. For a bounced cheque, follow the strict notice-then-complaint timeline under Section 138.
Commercial disputes above the specified value threshold can be filed directly before a designated Commercial Court under the Commercial Courts Act, 2015, which includes summary judgment provisions that can resolve genuinely undisputed claims faster than an ordinary civil suit.
Where the debtor is a company and the debt is above the statutory threshold, a statutory demand notice under the Insolvency and Bankruptcy Code, followed by an application before the NCLT if unpaid, is a genuinely powerful pressure point — many companies pay up rather than risk insolvency proceedings being admitted.
The IBC route deserves a specific word of caution: it’s a strong lever precisely because insolvency proceedings are serious for a company, but it’s meant for genuine, undisputed operational debt — not as a pressure tactic for a claim the debtor has a real, substantive dispute against. Tribunals have increasingly scrutinised applications that look like they’re being used to strong-arm payment on a genuinely disputed invoice rather than recover an undisputed debt, so this route works best when your underlying claim is clean and well-documented.
If your business isn’t a registered MSME, you don’t lose your remedy — you simply don’t get the MSMED Act’s specific 45-day/compound-interest framework, and instead rely on the cheque-bounce route (if applicable), a standard civil suit for recovery, or the commercial court/IBC routes described above, all of which remain fully available.
Documentation is what actually decides most of these cases: the purchase order, delivery/completion proof, the invoice itself, and every follow-up communication. Keep this organised from the point of the very first delay, not just once you’ve decided to pursue formal action.
| Situation | Best Route |
|---|---|
| You're a registered MSME, buyer delayed past 45 days | MSME ODR Portal — 3x bank rate interest, 90-day adjudication |
| Payment was via a cheque that bounced | Section 138 NI Act — notice, then criminal complaint |
| Higher-value dispute, not MSME/cheque-specific | Commercial Court, with summary judgment options |
| Corporate debtor, debt above statutory threshold | IBC statutory demand notice, then NCLT if unpaid |
MSME delayed-payment complaints go on the MSME ODR Portal. Cheque bounce complaints go before the Magistrate with jurisdiction over your bank’s branch. Larger commercial disputes go before the designated Commercial Court, and corporate insolvency applications go before the NCLT.
MSME ODR filing carries a nominal fee. A cheque bounce complaint and civil suit involve court fees proportional to the claim amount, plus legal costs if you engage counsel — which is strongly advisable for the commercial court and IBC routes given their procedural complexity.
A straightforward MSME ODR filing with clear documentation can often be done yourself. Cheque bounce complaints, commercial court filings, and especially IBC applications involve enough procedural precision that a lawyer is strongly advisable — a technical misstep on notice timelines or jurisdiction can genuinely sink an otherwise strong case.
Need professional legal help with this?
Find a Civil Lawyer on VidyodayIf this is a personal loan rather than a business transaction, our guide on recovering money someone owes you covers that specific process. For the formal complaint mechanics on the consumer side of a payment dispute, see our guide on filing a consumer complaint online.
Purchase orders, invoices, delivery records, and correspondence collectively serve as strong evidence of the transaction and amount owed — a single formal written contract isn’t a strict requirement to pursue recovery.
Under the MSMED Act, the statutory compound interest applies to registered MSMEs regardless of whether it was specified on the invoice. For non-MSME claims, courts can still award reasonable interest as part of a civil recovery award.
A genuine, substantive quality dispute changes your case significantly — it’s no longer a simple non-payment matter, and the specific facts of that dispute will need to be addressed as part of your claim.
Check your Udyam Registration certificate — the classification (micro, small, or medium) and registration date determine your eligibility for the MSMED Act’s specific payment protections.
Jurisdiction rules vary by route — MSME ODR complaints follow the supplier’s Facilitation Council jurisdiction, while cheque bounce complaints follow the bank branch where the cheque was presented; a lawyer can confirm the correct forum for your specific case.
Yes — cheque bounce timelines are strict and short (as outlined above), while civil recovery suits generally must be filed within three years of the debt becoming due; MSME claims are best filed promptly once the 45-day period lapses.
Generally, once you’ve initiated proceedings before the Facilitation Council, that becomes your primary route for that specific claim — discuss your specific situation with a lawyer before pursuing parallel proceedings on the same debt.
This is a real risk in any recovery matter — for corporate debtors, an admitted insolvency application at least brings the company’s financial position under formal scrutiny, which sometimes reveals recoverable assets a simple civil decree wouldn’t have surfaced.
This article is for general information only and does not constitute legal advice. The right recovery route depends heavily on your specific documentation, the debtor’s status, and the claim amount — consult a civil lawyer for guidance specific to your situation.
