MSME Payment Recovery (Samadhaan)

Overview

The strongest debt-recovery weapon most small businesses never use: under the MSMED Act, buyers must pay a registered MSME within 45 days (or the agreed period, capped at 45), failing which interest runs automatically at three times the RBI bank rate, compounded monthly — no contract clause needed. Claims go to the MSE Facilitation Council through the online Samadhaan portal: conciliation first, then arbitration by the Council itself, with awards enforceable as arbitral awards and a buyer who wants to appeal forced to deposit 75% of the award first. It reverses the usual power equation between small suppliers and large buyers.

Key Provisions — MSMED Act, 2006

Section 15 — payment within the agreed period, capped at 45 days from acceptance of goods/services.
Section 16 — automatic compound interest (monthly rests) at 3× the RBI bank rate on delayed payments.
Section 18 — Facilitation Council reference: conciliation, then arbitration; Samadhaan portal filing.
Section 19 — the buyer must deposit 75% of the award to challenge it, defusing the appeal-to-delay tactic.

What You Can Get

Principal with 3× compound interest

Council arbitration without court fees at suit scale

75% deposit barrier against buyer appeals

Interest that often exceeds the principal in old dues

How We Handle It

Eligibility & Math

Udyam registration, invoices, delivery proof — and the compound-interest computation buyers dread.

Demand Notice

A notice quoting the statutory interest — many buyers settle at this number.

Samadhaan Filing

Online reference to the Facilitation Council with the documentary record.

Award & Execution

Council award enforced; the 75% deposit rule blunts delay tactics.

Typical timeline: Statutory aim is 90 days at the Council · practice 6–18 months · interest compounds throughout.

Frequently Asked Questions

I wasn't Udyam-registered when I supplied the goods — am I out?

Registration at the time of supply is the general requirement, so register today for everything ongoing. For past supplies, ordinary recovery routes (summary suit, negotiation on the record) still work.

My buyer is a giant company — will the Council really rule against them?

Yes; Councils rule on invoices and the calendar, and the interest formula is mechanical. The 75%-deposit rule means even an appeal puts most of your money within reach.

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