MSME Samadhaan: How to File a Delayed Payment Case Against a Buyer

An invoice that is 60, 90, or 120 days overdue is not just a cash flow headache for a small supplier. It is something the law gives them a specific, formal way to escalate. MSME Samadhaan is the government system built for exactly that: a registered micro or small enterprise with an unpaid bill can take a buyer to a statutory council rather than relying on repeated follow up calls and emails that go nowhere. The mechanics of filing, and of what happens after, are worth understanding before a small overdue invoice quietly turns into a bad debt that gets written off.

What MSME Samadhaan actually is, and who can use it

MSME Samadhaan is the delayed payment monitoring system built around the Micro and Small Enterprises Facilitation Councils, the state level bodies known as MSEFCs, empowered under the MSMED Act, 2006 to resolve payment disputes between MSME sellers and their buyers. A registered micro or small enterprise that has not been paid within the timeline the Act allows can file a reference here, and the system routes it to the facilitation council with jurisdiction over the case. It is worth flagging a change that trips up anyone relying on an older guide: since 15 October 2025, new delayed payment complaints are filed on the government's newer MSME ODR (Online Dispute Resolution) Portal rather than directly through the original Samadhaan filing screen. The Samadhaan portal itself continues to operate for tracking legacy cases filed before that date, but a seller filing a fresh complaint today goes through the ODR portal, which then feeds into the same MSEFC process Samadhaan was always built around. In practice, this is a change in front door, not a change in the underlying law or the council structure handling the dispute.

Only a seller registered under Udyam as a micro or small enterprise can file, which is one more reason Udyam registration is worth completing even for a business that never plans to apply for a loan. Medium enterprises fall outside this specific protection. The complaint can be filed against any buyer, a private company, a government department, or a public sector unit, that has not paid within 15 days of acceptance where there is no written agreement, or within the agreed period where there is one, capped at a hard ceiling of 45 days from acceptance regardless of what the contract says. There is no minimum claim size prescribed, so even a modest overdue invoice is technically eligible to be filed, though sellers generally consolidate several overdue invoices from the same buyer into a single reference rather than filing separately for each one.

Filing a case: what the process actually involves

1. Confirm and gather the basics: Udyam registration number, the buyer's details including PAN, the invoice or purchase order, proof of delivery or acceptance of the goods or service, and any correspondence showing follow up on the overdue payment.
2. Register or log in using the Udyam number, since the system is built around that registration rather than a separate standalone login.
3. Enter the buyer's details and the specifics of the transaction: invoice date, acceptance date, amount due, and the period for which payment has been outstanding.
4. State the claim amount, which can include both the unpaid principal and the compounding interest the MSMED Act entitles the seller to, not just the base invoice value.
5. Upload supporting documents. A case built on invoices and delivery proof that clearly establish acceptance and non-payment moves faster than one where the paper trail is thin.
6. Submit the reference. It is then directed to the facilitation council with jurisdiction, generally based on the seller's location, and a notice goes out to the buyer to respond.

What happens after filing: conciliation, then arbitration

Once a reference is registered, the council does not jump straight to a binding decision. The MSMED Act requires conciliation first, either conducted by the council itself or referred to an institution providing conciliation services, aiming to bring buyer and seller to a mutually agreed settlement, with a target of completing this stage within roughly 90 days, though actual timelines vary by state and case backlog. If conciliation genuinely fails to produce a settlement, the same council can step in as an arbitrator itself, or refer the dispute to an arbitration institution, and issue a binding award. This two step design gives the buyer a real chance to settle before things turn into a formal arbitration proceeding, but it does not require the seller's patience to be unlimited. If conciliation is going nowhere, the case moves ahead into arbitration rather than sitting indefinitely.

The interest calculation, and why buyers do not take this lightly

Delayed payment under the MSMED Act carries compounding interest at three times the RBI notified bank rate, calculated monthly, running from the day after the due date until actual payment. This interest is not something a buyer can simply negotiate away in a settlement unless the seller specifically agrees to a lower figure. An award passed by the council is enforceable in the same way as an arbitral award. If a buyer wants to challenge it in court, the MSMED Act requires them to first deposit 75% of the award amount, a deliberately high bar meant to stop buyers from using a court challenge simply to stall payment further. Between the compounding interest and that pre-deposit requirement, a buyer that lets a dispute reach this stage is usually looking at a materially worse outcome than settling early would have produced.

For a small supplier, the value of MSME Samadhaan is less about any single case and more about what it does to a buyer's incentives once the option is visibly on the table. A buyer who knows a seller can escalate to a facilitation council, with compounding interest and a steep bar to challenging the outcome, tends to prioritise that seller's invoice differently than one who assumes slow payment carries no real consequence. Registering on Udyam, keeping a clean paper trail on acceptance dates, and knowing the current filing route are what turn that leverage from theoretical into real.