Background:
Hope all of you are doing great, this write up will be helpful for the small businesses that are searching to recover their outstanding from corporate and other entities.
Government of India has taken number of measures for the promotion and development of MSME ie., Micro, Small and Medium Enterprises as it is being presumed that this sector in very critical for the overall development of a nation. Further, these small businesses plays substantially role in the economy of a nation as they not only generate production but also help in creating employment opportunities for the younger generation.
Going forward, as the very title of the present article suggest, I will be restricting the flow only towards recovery of delayed payment, this mean that I am assuming you all are well aware of the provisions related to the classification and other condition for the recognition of MSME.
Quick look to the relevant Provisions
Chapter V of the Micro, Small and Medium Enterprises Development Act, 2006 (Hereinafter “MSMED”) contained the provisions with regard to the recovery of the outstanding from the buyer in case of any service(s) availed or good brought by him.
Section 15: It provides that buyer to make payment in case of any service(s) being availed or good brought by him on or before the date as agreed in writing otherwise before the appointed date.
It is to be noted that the period whether agreed in writing or otherwise cannot exceed a maximum period of 45 days from the day of acceptance or deemed acceptance. This means that buyer to make payment in all cases before 45 days. Here, it is equally important to understand the meaning of the terms ie., appointed date, day of acceptance or deemed acceptance collectively used in the aforesaid provision.
Appointed date means the day following immediately after the expiry of the period of 15 days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier.
Day of Acceptance means,-
(a) the day of the actual delivery of goods or the rendering of services; or
(b) where any objection is made in writing by the buyer regarding acceptance of goods or services within 15 days from the day of the delivery of goods or the rendering of services, the day on which· such objection is removed by the supplier;
Day of Deemed Acceptance means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services.
Section 16: Buyer shall be liable to pay compound interest with monthly rests in case of failure to comply with the aforesaid provision. Interest Rate will be 3 times of the bank rate notified by the RBI.
Section 17: Buyer to make payment along with interest.
Section 18: MSME may make a reference to the Micro and Small Enterprises Facilitation Council (“MSEFC”) and MSEFC may initiative on its own, action as it may deed necessary.
Though the provisions for recovery were always there from the constitution of the Act however, it is being very difficult for the small business registered under the Act to recover the outstanding from Big Entities. Further, the problem still persist, if you are also facing the same problem ie., whom to visit or before whom to file an application and/or complaint, or having any concern here is how your problem can be resolved.
Government of India has lunched https://samadhaan.msme.gov.in portal, a unique and central point where all the MSMEs can file their compliant.
Step 1: Visit above web portal and look for the option case filing for entrepreneurs/MSE units in the menu bar. After clicking above option enter your UAN and the mobile number which was provided at the time of registration along with the verification captcha. Thereafter, one time password will be sent to your registered email ID please enter that and click on continue.
Step II: Now, you will see an option Application entry which will help you to file an application and/or compliant with the appropriate authority, before filling it please keep the details of work orders and/or details of invoices ready or any other document which can prove your claim. You can provide the details over the portal, if it is less than 5 however, in case it is more than 5 then you can combined all invoices in single PDF and upload it over the web-portal and submit it, thereafter one more page will be pop-up for the review and final submission.
Step III: All done now MSEFC will send this application to the concerned respondent and status of your compliant can be seen Entrepreneur Application list, the application will be proceed faster than that of the court, furthermore the concerned officer may ask you to come and advise you in case of any other document and/or information being required by him.
Hope the write will provide clarity on how to proceed with filing of compliant for recovery of money.
You can reach out in case of any clarification at cspraveensingh111@gmail.com
Disclaimer: The above write up is only for the educational purpose and shall not constitute any opinion. Author in no case shall be responsible for and actions being taken on the basis of above write up.
Source:
a). Micro, Small and Medium Enterprises Development Act, 2006;
b). Personal experience
Author Bio
I have tried to file a case in MSME Samadhan, but it wont let me file a case has i am a trader(i have my own grocerry store). They state that only manufacturer and service provider can file a case. traders are not eligible for filing theapplication.
Please guide me what can i do. is their any other government facility to help trader like us?
One sales manager from Mnc billed 10 lacs material without our consent. we didn’t sell any material and we didn’t pay them. material is lying with us. they have not taken back the material even after many reminders. now they are asking us to pay and threaten us, saying they will file suit. guide us
OUR CLIENT FRONTLINE (NCR) BUSINESS SOLUTIONS PVT LTD NOT CLEARED INVOICE VALUE OF Rs.7656152.40 SINCE 8 MONTHS AFTER WORK STOPPED.CLIENT DENIED TO CLEAR. NEED SUPPORT.
We are a service provider company . my some buyer not release payment since five year ,how can we recover our many from them through MSME . Can we raise the case by CA or by are self .
if hv taken msme registration 3 years then can i claim for recovery against services rendered 5 years back?
not possible.
if i have filed civil recovery suit in court of law going so slow ln court can i file parellel complain in msme court also?
same relief cant be taken from two courts
if register my organization today the can i file complain for a services rendered year back period?
not possible
My supplier has not offered the service properly. I have raised concerns but he filed petition in MSME. What happens for genuine buyer concerns
join arbitration process and tell them this fact.
dear sir , we supplied products to eduation department of telanaga and for non payment from the dept we filed a case againest department and we got the order and payment with interest of 6% , we requested for atlease 12% interest ,but now we would like to file a case for getting in MSME , pl inform us now we are eligible to file a case in MSME court for interest now ?
How to apply complain late payment customer
Explain Procedure
Hi sir,
I received an PO for customised table tops from a company. The delivery date was 5th Jan 2020. I received 20 percent of the amount as advance. Now they are not paying the remaining amount. The order is with me. As per the terms decided, 20 percent was advance and rest before delivery. They keep on saying payments are been made .. they even sent fake neft screen shots couple of times. What legal action can I take ??
I don’t have work order from client . I only have invoice , how to file complaint
A reputated mnc isn’t realizing payment since two years took our material
Sir
1. My customer is a proprietorship concern Will MSME samadhan be applicable to him?
2 Supply was made in 2018 Nov 5, 3 years are over, he has paid me Rs 5000 cash in 2019. Can I use that date to calculate 3 years.
3 My date of registration is 15.04.2021. do the transactions have to be post this date for me to file claims?
Sir, Two queries-
While filingb the application whether amount payable ill also include interest?
Is it advisable to first communicate officially with the defaulter purchaser and askinhh him to pay the dues with interest?
No need to intimate anyone just file it with facilitation council.
Dear Sir,
I got WO from Technico India Pvt Ltd in Nov 2020 and i have completed the work in Feb 2021. But since last 7 months am not getting any payment from Technico. Regularly am calling to them and they said this weak will clear this weak will clear like that they are saying since last 7 months. So please i requested you that what should i do now.
if you are registered as MSME enterprise then file compliant with the Facilitation council and if you are other than that issue legal notice.
In this MSMED act, no provisions for delayed payments to medium enterprises? Sec 18 talks about Small & Micro Enterprises. What about Medium Enterprises? Which is the actual forum / court to file complaint for Medium Enterprises?
Yes for medium enterprises you need to file a civil suit for recovery of money.
May you clear the success rate and how much time its take to clear
I have received Award And Decree from Facilitation council kashmir in 2014 against Chief Engineer M&REwing kashmir pDD. The pending payment is 27.50 lakhs.The Govt. Officials disobey such orders to whose door i have to knock now
My payment is pending with chief Engineer M&REwing kashmir pdd since 2012 .the amount involved is ₹27.50lakhs Facilitation Council Kashmir award and Decree sent to said officials in 2014 and still payment is pending .what is the use of MSME ACT 2006 WHEN OFFICIALS disobey such orders kindly convey to Hon’abl P.M.of INDIA
You should immediately visit the district or High court with the award.
what do you mean by success rate, it purely depends upon how strong your matter is.
how far it is correct or justified to claim interest by the supplier, on holding of material supplies decision by the buyer, due to non requirement which is latter supllied by the supplier to buyer, after a year gap nearly around one year, after the decision of holding of material withraw by the buyer.
Suit through facilitation council is solved through an arbitration process, where both party decides what should be done
आदरणीय महोदय 18 दिसम्बर को bhel company में हमने RA bill 02 दिया गया था जिसका payment अभी तक नही हुआ है । जब कांट्रेक्ट एग्री मेन्ट हुआ था उसी समय हमें ये बताया गया था कि आप msme के दायरे में आते है इस लिए आपको पेमेंट के लिए बाकी लोगो के जैसे 1 माह का समय नही लगेगा । परन्तु आज वह बात लागू नही हो पा रही है । इस लिए BHEL से हमारा बिल भुगतान शिघ्र करवाने का कास्ट करे।
धन्यवाद
You should immediately visit facilitation council for resolution.
I want to cancel MSME registration, Because i planned start a business but due to lockdown it was not possible to move ahead .i just want to cancel the MSME registration,
If i do not cancel the MSME registration there will be any issues. as i did not started anything so far, and there was no transactions.
I want to cancel MSME registration, Because i planned start a business but due to lockdown it was not possible to move ahead .i just want to cancel the MSME registration,
If i do not cancel the MSME registration there will be any issues. as i did not started anything so far, and there was no transactions.
We have filled case with MSEFC,2 meeting over now 3rd is pending & buyer has not appeared till date & he might abscond so how much time MSEFC will take to give award & if case is clear what are chances or we need to file some other court Bcos we fell buyer may run away.
What is the monthly rate of interest we take from the customer? One of our customer is not paying us from March.
Sir How I can receive my pending bills payment from bsnl department
Dear Sir,
My firm is engaged in trading and distribution of mechanical components. I have registered my firm under UAM /MSME in June 2020. Under MSME act we have filed a complaint for recovery of dues of one customer whose invoice date is SEPT 2019 / OCT 2019 / NOV 2019. Its been almost 2 months still havent got response MSEFC Council although they have send a notice to the buyer on the date of our complaint. All I need to know is whether we are eligible to route the case through MSME or should check other way which you suggest. Awaiting your advise. Thanks in advance. JAY DAVE. Metasys
Sir how can payment recover if buyer had apply to close GST & also he start with other GST registration with other firm , proprietary firm .
Sir if buyer has appy to close his GST & if he start with new firm name-propritor , how we can recover our payment ?
We are registered under msme. Our product is c grade item for our customer. Some of them hold payment for indifinte period and then stop business with us and start procurement from another supplier. How Can we collect payment from these willful defaulters some limited company and some Pvt. Ltd?
Sir I am pmegp loan in Tumkur ruler village cattle feed manf my project not viable and source SBI manager scheme cancel in my project please help me 9113046212
Respected sir, I have lodge a complaint and Registered No.MH00015546 on 15/10/2019 for the delayed payment but still awaiting for the reply.I am unable to know.Viie status says Check with MSFC.
But failed.How to confirm? Please help me.
I have ragistred in MSME in March 2020
Can we apply for non payment claim in MSME Samadhan prior to registered invoices
I registered case with Samadhan and uploaded documents. We uploaded invoice and order separately and noticed from confirmation copy received that system only saves last loaded document and the earlier ones are deleted. We checked with Samadhan office if can submit hard copy set but were told, you will be called when case is taken and can give it that time. However after 3 months we received mail stating case is rejected as PO is not attached. Please confirm is there a procedure we approach them again and submit papers for reassessing case???
In february 2020 have registered in MSME.
Can we apply for non payment claim in MSME Samadhan prior to registered invoices. May be 2-3 months back of February 2020.
I have supply from delhi to mumbai , last month due to loack down agreement not done and everything done on phone conversion, now the buyer is not paying to us . my company is register in MSME. can we file complaint against them.
we have send the invoice to them and we have proff of delivery as well.
We have uploaded order copies and relevant invoice on MSME site. Our application Transferred to Facilitation Council MSEFC-Konkan Thane. Now what is the further process? By when we will received the payments? Let us know the process from uploading the files on MSME site to payment received.
I have not mentioned my msme number on my invoice but I’m already registered on Msme.can i file a complaint against my buyer for non payment by him.i received the order on phone.also what to mention in the work order number and date.what document should I upload for work order number
sir ,
we have supplied goods to govt office in multiple invoices against one PO and they have paid us part amount and balance they are not paying from last 3 years dispite many follow ups can we register complaint and how do we upload so many invoices
Good Morning Sir,
I Had Registered in MSME micro on 3-6-2020, but my bill to customer is on 31-3-2020 can I register complaint , recd Cerficiate also on 3-6-2020 of registration, Please tell
Sir i am supplies many invoice buyer he did not give me any work order she gave me order on telephonic he gives me half payment of my invoice can I take action against him on msme portals
Dear Saurendra Sir, The service sector “lessor” gives porta cabins, ACs, PCs on rent to commercial, industrial, institutional clients. Their gross block of cabins, AC, PC (used for rental business) value is Rs. 2.5 cr. And equipment to maintain, repair, lift etc. is only Rs. 5 lakhs. What amt to be considered as investment in equip to fit in micro status thereby availing FC platform for recovery of delayed payments?
What is the procedure for filing claim for “medium enterprises”
Dear sir ,
We have filed a case against a limited company for non payment of invoice. In May 2019 , the first supply has made and in july 2019 2nd supply has made against their purchase order. After regular followup the company has refused to pay saying that the material is not in use. In such cases they have damaged the material also. I have finally sent them a legal notice and also filed a complain in MSME samadhan . Now my question is what is the percentages of getting the payment and what time it may take
Do buyer and supplier both has to be registered under MSME act if we need to register complaint buyer.
If buyer is not an MSME member then how shall we recover money and how to register a complaint