MSME Claims & Limitations: Don’t Miss Your Legal Deadline

Delayed Payments Hurt — But Missing the Legal Deadline Hurts More

In India, thousands of MSMEs struggle with delayed payments from clients or buyers. What makes it worse? Many wait too long — and lose the legal right to recover what they're owed.

If you’re an MSME, you should know this clearly:

You have 3 years to legally claim your money. After that, the window closes.

At HEDG, we help businesses like yours take action before it’s too late — with proper documentation, legal guidance, and support to calculate and recover the full amount (with interest).

📅 What Is the Limitation Period for MSME Claims?

Under Indian civil law, you have 3 years from the date of the last unpaid invoice or payment due date to raise a legal claim.

After that, unless there's a valid reason or the limitation is extended (which is rare), your right to claim payment — and even interest — legally expires.

This 3-year rule applies whether you're:

• Filing under the MSME Samadhaan portal
  
  

• Initiating arbitration
  
  

• Filing a civil suit
  
  

❌ Why Do So Many MSMEs Lose Their Right to Recover?

Because they:

• Wait too long in hopes of an informal settlement
  
  

• Fail to keep proper payment records
  
  

• Aren’t aware of the legal timeline
  
  

• Don’t send formal reminders or emails that could help extend the claim window
  
  

A lot of MSMEs focus on maintaining relationships — which is important. But ignoring legal timelines often results in permanent loss of large amounts.

✍️ What Can Extend the Limitation Clock?

Here’s something many don’t realise:

Even a written acknowledgment of debt from the buyer can restart the 3-year clock.

That could be:

• An email confirming pending payment
  
  

• A signed statement of accounts
  
  

• A written reply to a payment reminder
  
  

• A part-payment or UPI/bank transaction referencing the original invoice
  
  

HEDG helps you track and document these actions properly — so you're protected, even if the payment is delayed.

💰 What About Interest on Delayed Payments?

Under the MSMED Act, you’re entitled to:

✅ Interest at 3x the RBI Bank Rate if the payment is not made within:

• 15 days (if no credit period is agreed), or
  
  

• 45 days (if there's a written agreement)
  
  

This interest is compounded monthly — and can become a significant amount if the delay is long.

🧾 How to Calculate Interest & Claim It

Let’s say your invoice was for ₹1,00,000 and was due on April 1st. The buyer hasn't paid even after 45 days.

If the RBI bank rate is 6%, your eligible interest would be:

6% x 3 = 18% annual interest → compounded monthly

Over 6 months, that’s nearly ₹9,000 extra — legally claimable.

But you need proper:

• Invoices
  
  

• Delivery proof
  
  

• Terms of payment
  
  

• Communication trail
  
  

• Udyam registration
  
  

• Interest computation records
  
  

HEDG can prepare your interest calculation sheet and help file it as part of your Samadhaan or legal claim.

🗂️ How to Keep Records in Order (And Save Your Case)

Here’s a checklist to avoid losing your claim:

✅ Clear, dated invoices
✅ Written agreement on payment terms (email/PO)
✅ Proof of delivery or service completion
✅ All emails or WhatsApp follow-ups asking for payment
✅ Bank statement to track part-payments
✅ Signed acknowledgments or replies from the buyer

🛡️ How HEDG Protects MSMEs Before It’s Too Late

We know most MSMEs don’t have in-house legal teams. That’s why HEDG supports businesses by:

• Reviewing overdue payments and risk exposure
  
  

• Checking if limitation period is active
  
  

• Preparing interest computation as per MSMED Act
  
  

• Drafting acknowledgment request letters
  
  

• Filing MSME Samadhaan applications
  
  

• Assisting in arbitration or legal claim filing before limitation ends
  
  

We’re not a law firm with layers of billing — we’re your CA-backed compliance partner that gets the basics right, fast.

✅ Final Word: Time Is Money — Don’t Let It Slip Away

If your payments are stuck and it’s been over a year — don’t delay further. You may still have time to recover your dues and interest, but the clock is ticking.

Let HEDG help you file strong, timely claims — while you focus on running your business.

📞 Don’t Wait Until It’s Too Late

Talk to HEDG today — and make sure your claims are protected, prepared, and properly pursued.
👉 Contact Us