Udyam registration
Proof that you were a registered micro or small enterprise at the relevant time.
MSME recovery · Lucknow & Uttar Pradesh
MSME delayed payment recovery in Lucknow
Supplied goods or services and still waiting to be paid? If you are a registered micro or small enterprise, the law gives you a faster route than a civil suit — with interest at three times the RBI bank rate. Aidwish prepares and pursues your claim from legal notice to award.
MSME Samadhaan filingMSE Facilitation CouncilInterest under Section 16Award enforcement
In short
Under the MSMED Act, 2006, a buyer must pay a micro or small supplier within the agreed period, which cannot exceed 45 days from acceptance. If it does not, the buyer owes compound interest with monthly rests at three times the RBI bank rate. The supplier can file a delayed-payment application on the MSME Samadhaan portal, which goes to the Micro and Small Enterprises Facilitation Council (MSEFC) for conciliation and, if needed, arbitration. Aidwish prepares the claim, represents you before the Council and helps enforce the award.
Why MSMEs wait
Delayed payments are the biggest cash-flow risk for small suppliers
Small manufacturers, traders and service providers across Lucknow and Uttar Pradesh supply larger companies, contractors and government-linked buyers every day. The pattern is familiar: the material is delivered, the invoice is accepted, and payment slips from 30 days to 90, then 180. Meanwhile the supplier pays salaries, GST and bank interest from its own pocket. Chasing politely rarely works, and a civil suit can take years.
Parliament recognised this problem in the Micro, Small and Medium Enterprises Development Act, 2006. Chapter V of the Act gives registered micro and small enterprises a statutory right to be paid on time, a steep rate of interest when they are not, and a dedicated forum — the Micro and Small Enterprises Facilitation Council — that must decide the matter in a time-bound way. The MSME Samadhaan portal lets suppliers file these claims online.
Since 1 April 2024, the pressure on buyers has also increased through income tax. Under Section 43B(h) of the Income-tax Act, 1961 — now Section 37(2)(g) of the Income-tax Act, 2025 — a buyer cannot claim a deduction for amounts owed to micro and small suppliers until they are actually paid, if payment is made beyond the time allowed under the MSMED Act. A well-drafted notice that explains this consequence often gets money moving before any filing is needed.
Aidwish works with suppliers in Lucknow, Kanpur, Unnao, Barabanki and across Uttar Pradesh. We check eligibility first, calculate the interest correctly, and choose the route most likely to recover the money quickly — notice, Samadhaan and MSEFC, insolvency or a commercial suit.
The law in brief
Your rights under the MSMED Act
- Who is protected
- Micro and small enterprises (supplier registered under Udyam). Medium enterprises are not covered by the delayed-payment chapter. Courts have linked the benefit to registration at the relevant time, so registration dates matter.
- Payment deadline
- Section 15: the buyer must pay on or before the agreed date, which cannot exceed 45 days from acceptance or deemed acceptance; where there is no agreement, within 15 days.
- Interest
- Section 16: if payment is late, the buyer must pay compound interest with monthly rests at three times the bank rate notified by the RBI, from the appointed day — notwithstanding any agreement to the contrary.
- Forum
- Section 18: either party can refer the dispute to the Micro and Small Enterprises Facilitation Council, which first conducts conciliation and then arbitration if conciliation fails.
- Time-bound decision
- The Council is required to decide the reference within 90 days from the date of the reference.
- Challenging an award
- Section 19: a buyer challenging the award must first deposit 75% of the amount awarded, which makes awards hard to stall.
- Income tax pressure
- Section 43B(h) of the Income-tax Act, 1961 (from 1 April 2024; Section 37(2)(g) of the Income-tax Act, 2025 from tax year 2026-27): a buyer’s deduction for dues to micro and small enterprises is allowed only on actual payment if paid beyond the MSMED Act time limit.
The RBI bank rate changes from time to time; interest is computed at three times the rate notified for the relevant period. This page is general information — we review your documents before advising on a specific claim.
Quick estimate
How much interest is your buyer liable to pay?
Use our free MSME delayed payment interest calculator to estimate the compound interest at three times the RBI bank rate on any overdue invoice.
Open the calculatorHow we recover
MSME payment recovery services from Aidwish
- Eligibility checkUdyam registration, dates of supply and acceptance, and whether your claim falls within the MSMED Act.
- Interest computationPrincipal and compound interest calculated correctly for each invoice and period.
- Legal demand noticeA notice citing Sections 15 and 16 and the Section 43B(h) consequence for the buyer.
- MSME Samadhaan filingOnline application with invoices, delivery proof, ledgers and correspondence.
- MSEFC conciliationRepresentation in conciliation meetings to reach a settlement where possible.
- MSEFC arbitrationStatement of claim, evidence and arguments if conciliation fails.
- Award enforcementExecution of the award as a decree and opposition to challenges without the 75% deposit.
- Alternative routesInsolvency notices, commercial suits or summary suits where they suit the facts better.
Process
From unpaid invoice to recovered amount
Share documents
Invoices, purchase orders, delivery proof, ledger and Udyam certificate.
Assess & calculate
We confirm eligibility and compute principal and interest.
Notice
We send a legal demand notice; many buyers settle here.
Samadhaan & MSEFC
We file and represent you in conciliation and arbitration.
Recover
We enforce the award or settlement until the money is received.
What decides a claim
Documents that win MSME recovery cases
Purchase order or contract
The agreed payment terms, if any, and the scope of supply.
Proof of delivery and acceptance
Delivery challans, e-way bills, GRNs or acceptance emails that start the 45-day clock.
Invoices and ledger
Invoices raised and the running account showing what is unpaid.
Correspondence
Emails and letters showing follow-ups, admissions or disputes raised by the buyer.
Quality complaints
Any objections raised by the buyer, and how they were resolved — often the buyer’s main defence.
Who handles your matter
MSME recovery and arbitration led by Devendra Yadav
Devendra Yadav advises MSMEs on recovery, arbitration, GST and finance — so your claim is built on clean books and tax-consistent invoices, and pursued through the forum most likely to pay.
Devendra YadavTaxation, Litigation & Regulatory Advisory
- MSEFC conciliation and arbitration
- Notices that use Section 43B(h) pressure
- Enforcement of awards and settlements
FAQ
MSME payment recovery — questions answered
How do I file an MSME delayed payment complaint?
A micro or small enterprise registered under Udyam can file a delayed-payment application on the MSME Samadhaan portal with invoices, delivery proof and correspondence. The application is forwarded to the Micro and Small Enterprises Facilitation Council of the relevant state, which conducts conciliation and, if that fails, arbitration.
What is the interest rate on delayed MSME payments?
Under Section 16 of the MSMED Act, the buyer must pay compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India, from the date the payment became due. This applies even if the contract says otherwise.
Within how many days must a buyer pay an MSME supplier?
Within the agreed period, which cannot exceed 45 days from acceptance or deemed acceptance of the goods or services. If there is no written agreement, payment is due within 15 days.
Can a medium enterprise use MSME Samadhaan?
No. The delayed-payment provisions in Chapter V of the MSMED Act protect micro and small enterprises. Medium enterprises must use other recovery routes.
What is MSEFC?
The Micro and Small Enterprises Facilitation Council is a state-level body under Section 20 of the MSMED Act that decides delayed-payment disputes through conciliation and arbitration. It is required to decide a reference within 90 days.
Can the buyer challenge the MSEFC award?
Yes, but under Section 19 of the MSMED Act a buyer must first deposit 75% of the amount awarded before a court will entertain the challenge, which makes awards difficult to stall.
Does Section 43B(h) help in recovery?
It adds pressure. From 1 April 2024, a buyer can claim a tax deduction for dues to micro and small enterprises only on actual payment if it pays beyond the MSMED Act time limit. Many buyers settle once this consequence is pointed out.
Related services
Often needed alongside this
Free first discussion
Tell us about the unpaid invoices
Share the notice, order or situation in brief. We review it and call you back, in Hindi or English.