Debt Recovery

Debt Recovery from MSME Department (Under MSME Act, 2006) (Debt Recovery Service in Delhi)

Micro, Small, and Medium Enterprises (MSMEs) often face delayed payments from buyers, affecting cash flow and business operations. The MSME Act, 2006 provides a legal mechanism for MSMEs to recover outstanding dues efficiently.

Legal Remedies for MSME Debt Recovery

1. Filing a Complaint with the MSME Samadhan Portal:

MSMEs can recover dues by filing a complaint on the MSME Samadhan Portal, which facilitates resolution through the Micro & Small Enterprises Facilitation Council (MSEFC).

  • Eligibility: The supplier must be a registered MSME under Udyam Registration.
  • Timeline: Buyers must make payments within 45 days (as per Section 15 of the MSME Act).
  • Penalty for Delay: If payment is delayed beyond 45 days, the buyer must pay compound interest at 3 times the bank rate (RBI prescribed rate).

Process of Filing a Complaint:\

Step 1: Register on the MSME Samadhan Portal and file a complaint.
Step 2: The complaint is referred to the Micro & Small Enterprises Facilitation Council (MSEFC).
Step 3: MSEFC facilitates settlement through conciliation or arbitration.
Step 4: If unresolved, MSEFC issues an award, which is legally enforceable.

2. Legal Action Under the MSME Act & Other Laws

If the debtor (buyer) refuses to comply with the MSEFC order, further legal action can be taken:

  1. Execution of MSEFC Award – Enforcing the award as a court decree.
  2. Filing Case Under the Arbitration and Conciliation Act, 1996 – If MSME opts for arbitration.
  3. Insolvency Proceedings Under the IBC, 2016 – Initiating insolvency against corporate debtors.
  4. Cheque Bounce Case (Section 138, NI Act) – If payment failure involves dishonored cheques.
  5. Summary Suit Under CPC (Order XXXVII) – Fast-track legal recovery through civil court.
  • MSEFC awards are binding and can be directly enforced through courts.

3. Representation & Legal Assistance in MSME Debt Recovery

We provide end-to-end legal support to MSMEs in recovering outstanding dues, including:

  • Filing claims on the MSME Samadhan Portal.
  • Representation before MSME Facilitation Councils & Courts.
  • Drafting & Enforcing Legal Recovery Notices.
  • Negotiation & Dispute Resolution with Buyers.
  • Legal action for execution of MSEFC awards.