Recovering Delayed Payments as an MSME: An Illustrative Scenario

What follows is a fictional, illustrative scenario intended only to demonstrate how the general rules above apply to a typical set of facts. It does not describe a real person, client, or case.

The illustrative scenario

The question

A reader in this situation might ask:

How the general rule applies

Under MSMED Act ss.15-16, a buyer must pay a registered micro or small enterprise within 15 days, or within any agreed period not exceeding 45 days; a delay attracts compound interest, with monthly rests, at 3 times the RBI's notified bank rate.

This is understood to be the position, though it is worth confirming locally that an MSMED Amendment Bill 2026 passed both houses of Parliament in August 2026, reportedly adding 90-day mediation and award timelines and pre-deposit rules, but its presidential assent and commencement date are not confirmed as of this research.

Within 15 days, or within any agreed period not exceeding 45 days. A delay attracts compound interest at 3 times the RBI's notified bank rate, with monthly rests.

What often gets missed in situations like this

• Not confirming MSME registration (Udyam) before relying on these timelines — the protection applies to registered enterprises.
• Treating the proposed 2026 amendment's mediation/award timelines as already in force — commencement had not been confirmed at the time this page was written.

As noted above, this scenario is a constructed illustration used to explain the general rule — it does not describe a real client, case, or outcome.

For the general rules, see Recovering Delayed Payments as an MSME and Recovering Money Owed to You: The Limitation Period and Your Options.

If you are weighing a decision on this, a short consultation can help map out the options.

This page is general information about the law in India and is not legal advice. The position can vary with the facts, so it is worth getting advice on your specific situation.