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Home / Legal Notices / Payment Overdue Notice
Last updated: 2 October 2026
When a customer stops paying invoices, a formal demand is often the fastest way to get paid. Expertvuw’s team reconciles what is owed, identifies the best recovery route — including MSME Samadhaan and IBC where relevant — and coordinates the notice through an independent advocate.
A payment overdue notice formally demands payment of an outstanding amount within a set time, usually with interest as per the contract. It creates a clear record and often prompts payment or negotiation without litigation.
If the notice does not work, several routes are available. Micro and small enterprise suppliers registered on Udyam can claim under the MSMED Act, 2006: buyers must pay within the agreed period (not more than 45 days), with compound interest at three times the RBI bank rate on delays, and claims can be filed online through MSME Samadhaan before the Micro and Small Enterprises Facilitation Council. Other options include a commercial suit (with pre-institution mediation for specified value commercial disputes), arbitration where the contract provides for it, and — for unpaid operational debts of ₹1 crore or more from a company — an insolvency application under the IBC after a section 8 demand notice.
Choosing the route depends on the amount, the debtor’s solvency, contract terms and evidence available.
Basis: Indian Contract Act, 1872; MSMED Act, 2006 (sections 15–18); Commercial Courts Act, 2015 (section 12A); Arbitration and Conciliation Act, 1996; Insolvency and Bankruptcy Code, 2016 (sections 8 and 9). Last updated: 27 September 2026.
Micro and small suppliers must be paid within the agreed period, not more than 45 days.
Compound interest at three times the RBI bank rate on delays.
Online filing of delayed payment claims before the MSEFC.
Pre-institution mediation for commercial suits without urgent relief.
₹1 crore minimum default for an insolvency application.
Invoices, acceptance and ledger confirmations are key.
Weak documentation slows recovery.
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Payment recovery connects with these services.
MSME delayed payment protection.
IBC demand notices.
Invoking arbitration.
When payment cheques bounce.
Confirm the amount and interest.
Advocate issues the demand notice.
Explore payment plans.
Choose MSME, suit, arbitration or IBC.
Coordinate the filing.
Track recovery to closure.
Move to the chosen remedy promptly.
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Share your query and our team will reply during business hours.
A formal demand for payment of outstanding amounts within a set time, usually issued through an advocate.
Yes. Compound interest at three times the RBI bank rate applies under the MSMED Act.
An online portal for micro and small enterprises to file delayed payment claims before the Facilitation Council.
For unpaid operational debts of ₹1 crore or more from a company, after a section 8 demand notice.
Pre-institution mediation is required for commercial suits that do not seek urgent interim relief.
ACS – Director, Expertvuw Management Pvt Ltd
Documents are drafted by Expertvuw’s team for your review. Legal notices are issued, and representation before courts, tribunals and consumer commissions is made, by independent advocates. Expertvuw is a corporate services company, not a law firm.