Delayed payments are one of the most common — and most damaging — problems faced by micro and small enterprises. The Micro, Small and Medium Enterprises Development Act, 2006 gives suppliers a powerful, low-cost remedy, and the Government's Online Dispute Resolution (ODR) portal now makes it possible to pursue that remedy almost entirely online.
What the law guarantees
Where no payment date is agreed, a buyer must pay within 45 days of accepting the goods or services. On delay, the buyer becomes liable for compound interest at three times the RBI-notified bank rate, with monthly rests — regardless of anything the contract may say.
How the process works
A registered enterprise files its claim on the MSME Samadhaan / ODR portal, uploads its invoices and orders, and the matter first goes into online conciliation. If it is not settled, it is referred to the Micro & Small Enterprise Facilitation Council, which conciliates and, failing settlement, arbitrates — aiming to decide within 90 days.
Before you file
- Keep your Udyam Registration current.
- Collect invoices, purchase or work orders, and delivery proof.
- Preserve reminders and correspondence chasing payment.
Used well, this route is faster and far cheaper than a civil suit — and the interest entitlement often brings buyers to the table quickly.