Unpaid Invoice Legal Notice: How to Recover Payment in India

An unpaid invoice legal notice is a written demand, sent by registered post and email, asking the customer to pay a stated amount within a stated time, usually 15 days, before you file a case. It is mandatory only for a bounced cheque (Section 138 of the Negotiable Instruments Act) and for suing the government, but it builds your record in every other case. A micro or small supplier with Udyam registration files new delayed-payment cases on the MSME ODR portal (odr.msme.gov.in) from 15 October 2025, and a civil suit must generally be filed within three years.

Unpaid invoice legal notice: what to include and how to send it

A good notice is short, dated and specific. Include:

• both parties’ legal names and addresses, and your GST and Udyam numbers;
• invoice numbers, dates, purchase order, proof of delivery and due date;
• the exact amount due, payments received, and interest only if agreed in writing or claimed under the MSMED Act;
• a deadline, usually 15 days from receipt, and what you will do next: civil suit, MSME reference or cheque bounce complaint.

Send it by registered post and email, and keep the receipts. Do not threaten a police case over a civil debt. See legal notice for recovery of money and how to send a legal notice.

Example: Rakesh, who runs a packaging unit in Kanpur, supplies cartons worth ₹2.4 lakh to a Lucknow company on 30 days’ written credit. After the due date it stops answering. He sends a notice with the invoice, challan and ledger, waits 15 days, then files his claim.

Cheque bounce: the Section 138 timeline

The clock is strict. The cheque must have been presented within its validity (three months from its date). Send the demand notice within 30 days of the bank’s information that it was returned unpaid. The drawer has 15 days from receipt to pay; if he does not, file a complaint within one month after that (Section 142). The punishment is imprisonment up to two years, a fine up to twice the cheque amount, or both, and the court can order interim compensation up to 20 per cent (Section 143A). See the cheque bounce notice guide and complaint filing guide.

MSME ODR portal for delayed payment from 15 October 2025

Under the MSMED Act, 2006, a buyer must pay a micro or small supplier by the agreed date, which in no case may exceed 45 days from acceptance of the goods or services (Section 15). With no written agreement, payment is due by the “appointed day”, 15 days from acceptance. Section 16 adds compound interest with monthly rests at three times the bank rate notified by the Reserve Bank, and Section 17 makes the buyer liable for both.

By a letter of 3 October 2025, the Ministry of MSME directed that from 15 October 2025 all new delayed-payment references are filed only on the MSME ODR portal, odr.msme.gov.in; MSME Samadhaan stays open only for existing cases. The reference goes to the State’s Micro and Small Enterprises Facilitation Council, which tries conciliation and then arbitrates (Section 18), aiming to decide within 90 days. A buyer challenging the award in court must first deposit 75 per cent of it (Section 19). Check the portal for any charges.

• Who can file: a micro or small supplier with Udyam registration. Medium enterprises are outside Sections 15 to 18.
• Registration timing: register before you contract. In Silpi Industries (2021) and Mahakali Foods (2022) the Supreme Court indicated that registration after the contract does not help; in 2025 (NBCC v. State of West Bengal) it referred the question to a larger bench, so do not rely on late registration.

Summary suit and limitation period for recovery

If an unpaid invoice legal notice is ignored and the sum is fixed under a written contract, a summary suit under Order XXXVII of the Code of Civil Procedure is quicker than an ordinary suit. The defendant must appear within ten days of service. You then serve a summons for judgment, and he has ten days to seek leave to defend. Leave is refused if there is no substantial defence, and without leave you get a decree.

For a commercial dispute of the specified value (₹3 lakh or more), pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 is mandatory unless you seek urgent interim relief (Patil Automation v. Rakheja Engineers, 2022).

Limitation is three years under the Limitation Act, 1963: for goods sold on credit, from the end of the credit period (Article 15); with no credit period, from delivery (Article 14); for work done with no fixed payment time, from completion (Article 18). A legal notice does not stop the clock. A signed written acknowledgment before expiry gives a fresh three years (Section 18), as does part-payment (Section 19), so keep emails admitting the dues.

Frequently asked questions

What is an unpaid invoice legal notice and is it compulsory?

It is a formal written demand for the invoice amount with a deadline. It is compulsory only for cheque bounce (Section 138) and when suing the government (Section 80 CPC). For other dues it is not required, but it shows you gave the customer a fair chance to pay.

How many days should I give in the notice?

Usually 15 days from receipt. For a bounced cheque the law fixes 15 days.

Can I file on the MSME ODR portal if my customer does not pay?

Yes, if you are a micro or small enterprise with a valid Udyam registration and the dues are for goods or services you supplied. New cases go to odr.msme.gov.in from 15 October 2025.

What is the limitation period to recover an unpaid invoice?

Generally three years under the Limitation Act, 1963, counted from delivery, the end of the credit period or completion of the work. A written acknowledgment or part-payment gives a fresh period.

Quick quiz

To send an unpaid invoice legal notice and get paid with confidence, see the Law for Shopkeepers and Small Businesses certificate course. It is a Lexfolio certificate of completion, not a degree or licence to practise law.

Sources

• Micro, Small and Medium Enterprises Development Act, 2006: ss.15 to 19
• Ministry of MSME, letter of 3 October 2025 on the MSME ODR portal
• Negotiable Instruments Act, 1881: ss.138, 142, 143A
• Code of Civil Procedure, 1908: s.80 and Order XXXVII
• Commercial Courts Act, 2015: s.12A; Patil Automation v. Rakheja Engineers (SC, 2022)
• Limitation Act, 1963: ss.18, 19; Articles 14, 15, 18
• Silpi Industries (2021); Mahakali Foods (2022); NBCC v. State of West Bengal (2025), all Supreme Court

This page is for education and general information, not legal advice for a specific case. Law as on 29 October 2026.