Practice Areas
MSME Claims & Delayed Payment Recovery
The MSMED Act is a collection statute with teeth — if the supplier is registered, the invoice is due, and the interest is worked correctly.
Registered micro and small enterprises are entitled to payment within the agreed period, capped at 45 days, or within 15 days where there is no written agreement. Default attracts compound interest at three times the RBI Bank Rate, with monthly rests. That is not a negotiating position. It is Section 16.
What this covers
- References to the Micro and Small Enterprises Facilitation Council under Section 18
- Interest workings under Section 16, including month-wise compounding
- Challenges to and enforcement of MSEFC awards
- Section 19 — the 75% deposit required of a buyer who appeals an award
- Status disputes: whether the supplier was an MSME at the relevant time, and whether the buyer can go behind the Udyam certificate
- Parallel civil or commercial suits, and when the Act ousts or stays them
The calculator
A working of Section 16 interest is the starting point of almost every demand. Use the MSME delayed payment interest calculator for an indicative figure and a copyable legal note. It is not a substitute for a formal reference.
Typical instructions
A manufacturer whose invoices have aged past 45 days; a works MSME facing a PSU that treats the Facilitation Council as optional; a buyer served with a Council award who has not been told about the deposit on appeal. The documents that matter are the Udyam registration, the purchase order, proof of supply or completion, and the invoice dates.
Read the note on appointed day, the 45-day cap, and Section 16 interest.