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Hemant Surati (Lawyer and Legal Advisor)     28 March 2022

Outstanding payments

One of the Pvt Ltd Company deliberately delaying the payments of one of his supplier who is proprietorship firm . the delay was  @ 2 years , so the firm has sent the notice of recovery of due payments , however in reply the pvt ltd company send the reply the and arguing material supply the quality and other thins are  poor n based on this ground deny to pay the payments. 

Now there was two way remedy. 

* file the civil suit in proper jurisdiction      or

* file the case with MSME court which was faster then civil court. 

Which is best ? Need expert comments on the same.

Thanks in advance. 








 8 Replies

Dr J C Vashista (Advocate)     29 March 2022

Can you please let me know address / designation of MSME Court, for my knowledge.

G.L.N. Prasad (Retired employee.)     29 March 2022

As of now, filing a civil case is the only alternative known and it is known to all it takes several years and the final verdict is not certain in favor of the plaintiff.

Unless details of agreements, standards, quality, correspondence in between two parties on such demand and denial are known, it is not proper to offer guidance.

please contact the advocate and issue a formal notice through him.

Hemant Surati (Lawyer and Legal Advisor)     29 March 2022

We can file complain under MSME refer attachedments. 

Attached File : 243272 20220329094536 msmed2006act.pdf downloaded: 22 times
1 Like

G.L.N. Prasad (Retired employee.)     29 March 2022

The process is for arbitration and reconciliation and so far there is no success reported on the outcome of the Act.  However, as this is an alternate remedy and to be settled within a time frame of 90 days you may try your luck.  To my knowledge, if the other party refuses to appear for such conciliation, there can not be a solution.   There is already such a procedure for all litigations as Pre Litigation conciliation in District Legal Services Authority.

Kishor Mehta (CEO)     30 March 2022

Filing a civil suit for realisation of the debt is the only option. Make haste as it takes time to record a civil suit, and law of lmitations applies if a collection suit is not filed within three years.

Hemant Surati (Lawyer and Legal Advisor)     30 March 2022

In MSME the realisation limit is 90 Days - Retail and wholesale trade enterprises were brought under the Act , 

If party refuse to enter in conciliation - can we go to civil suir then after ? if Limitation act permits. 


G.L.N. Prasad (Retired employee.)     30 March 2022

The limitation is subject to some exceptions.  If a party is sincerely trying to get a remedy through another appropriate channel then such period has to be added to the limitation period.  The party should be able to convince the court that he is in good faith trying to recover such amounts through another public authority.

P. Venu (Advocate)     13 April 2022

With due respect to Mr. GLN Prased, it is stated that there could be no condonation of delay in filing a suit. However, the querist can take advantage of the recent direction of the Supreme Court on account of the Covid situation -

  1.  The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and   23.09.2021,   it   is   directed   that   the   period   from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasijudicial proceedings. 
  2. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
  3.  In cases where the limitation would have expired during the   period   between   15.03.2020   till   28.02.2022, notwithstanding   the   actual   balance   period   of   limitation remaining, all persons shall have a limitation period of 90 days  from   01.03.2022.  In   the  event   the   actual  balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.

​​​​​​​As regards the issue raised by the queriest, the buyer cannot adopt the alibi of quality to deny payment. If ther e is no pending dispute as to quality, the querist can approach the competent court in a summary proceeding.​​​​​​​

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