How to Recover Unpaid Dues from a Client in India (2026)
How to recover money a client owes you in India in 2026: the demand notice, the summary suit under Order XXXVII, when an ordinary suit fits, the MSME Samadhaan route for registered small businesses, arbitration, and how to track recovery matters.
How-To Guide · Debt Recovery
To recover unpaid dues from a client in India, start with a clear demand notice, and if that fails, choose the right legal route: a summary suit under Order XXXVII of the Code of Civil Procedure for a clear money debt, an ordinary money suit where the claim is disputed, the MSME Samadhaan route if you are a registered small business, or arbitration if your contract has an arbitration clause. Which route is fastest depends on whether the debt is admitted and on what your paperwork shows. This guide explains each option in plain terms, when to use it, and how to keep track of the recovery once it reaches a forum. Last verified October 2026.
- Step one: send a clear written demand or legal notice with the exact amount and a deadline to pay.
- Clear debt: a summary suit under Order XXXVII of the Code of Civil Procedure is faster, because the client needs the court's leave to defend.
- Registered MSME: file a reference before the MSEFC under Section 18 of the MSMED Act, 2006, through the MSME Samadhaan portal, with interest on delayed payment.
- Contract clause or bounced cheque: use arbitration if the contract provides for it, and the Section 138 cheque bounce route where a cheque was dishonoured.
01Start with a demand notice
The first step is a written demand, usually sent as a legal notice through an advocate. It states the exact amount due, the invoices or contract it arises from, and a clear deadline to pay, commonly 15 to 30 days. A good notice often gets payment without a case, and even where it does not, it becomes useful evidence that you asked for the money and the client did not pay.
Keep the notice factual: attach the invoices and the ledger, give the figure precisely, and avoid threats. For the structure and content, see the legal notice format. Send it by a mode that proves delivery, such as registered post and email.
02Summary suit versus ordinary suit
If the notice fails, the civil route is a money suit. There are two kinds, and picking the right one saves time.
| Route | What it is | When to use it |
|---|---|---|
| Summary suit (Order XXXVII CPC) | A fast-track suit for a clear money debt on a written contract, bill of exchange or invoice, where the defendant needs the court's leave to defend | When the debt is clear and well documented, and you want a quicker decree |
| Ordinary money suit | A regular civil suit with full trial, evidence and arguments | When the claim is genuinely disputed, or the debt does not fit the summary-suit categories |
The summary suit under Order XXXVII is the stronger choice for undisputed dues, because the client cannot defend as of right; they must first satisfy the court that there is a real defence. For the mechanics, see how to file a money recovery summary suit.
03MSME Samadhaan for small businesses
If your business is a registered micro or small enterprise and your client is the buyer, the law gives you a faster, cheaper route than a civil suit. Under the Micro, Small and Medium Enterprises Development Act, 2006, a buyer must pay a registered MSME supplier within the agreed period, and in any case within 45 days of accepting the goods or services. If the buyer is late, interest runs on the amount.
When the buyer does not pay, you can file a reference before the Micro and Small Enterprise Facilitation Council (MSEFC) under Section 18 of the Act, online through the MSME Samadhaan portal. The Council first tries conciliation, and if that fails, it takes up arbitration itself.
This route is only for registered MSME suppliers
You must have a valid Udyam registration and the supply must fall within the Act. The portal is MSME Samadhaan at samadhaan.msme.gov.in.
04Arbitration if the contract allows it
If your contract with the client has an arbitration clause, the dispute usually must go to arbitration rather than a civil court. Arbitration under the Arbitration and Conciliation Act, 1996, is a private process where an arbitrator decides the claim and makes an award, which can then be enforced like a decree.
Arbitration can be quicker and more private than a court case, but it needs a valid clause and can involve the arbitrator's fees. Read your contract first. If there is no arbitration clause, you cannot force arbitration, and the civil suit or MSME route applies instead.
05Cheque bounce as a parallel route
If the client paid by cheque and it bounced, you have an extra, quick pressure point. A dishonoured cheque given to pay a debt lets you proceed under Section 138 of the Negotiable Instruments Act, 1881. You must send a demand notice within 30 days of the cheque return memo, and if the client does not pay within 15 days, you can file a complaint.
This runs separately from, and can run alongside, your money suit. For the notice step, see the cheque bounce notice under Section 138, and to follow such matters, see how to track Section 138 cases by CNR and party name.
06Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
Recovering dues often means running more than one matter at once, a summary suit, a cheque bounce complaint, perhaps an MSME reference, each with its own dates. Claw tracks cases, orders and hearings across 9,102 courts, benches and forums, so you can follow every recovery matter by party name and get the next hearing date without checking cause lists by hand. You can also search 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, to see how courts have decided summary suits and Section 138 matters on facts like yours, with results in under 5 seconds. Claw does not use your case documents to train its AI models.
Create a FREE Claw account to track your recovery matters by party name and never miss a date, and use case search across Indian courts to find rulings that help your claim.
07Sources and further reading
- India Code (CPC 1908, MSMED Act 2006, Arbitration and Conciliation Act 1996, NI Act 1881): indiacode.nic.in
- MSME Samadhaan (delayed payment monitoring for registered MSMEs): samadhaan.msme.gov.in
- eCourts (case status of district courts): ecourts.gov.in
- Claw: clawlaw.in
This guide is general information, not legal advice. The right route depends on your documents and your contract, so take advice from an advocate before you act.
08Frequently asked questions
How do I recover money a client has not paid in India?
Start with a written demand or legal notice stating the exact amount and a deadline. If that fails, choose a route: a summary suit under Order XXXVII of the Code of Civil Procedure for a clear debt, an ordinary suit if the claim is disputed, an MSME Samadhaan reference if you are a registered MSME supplier, or arbitration if your contract has an arbitration clause.
What is a summary suit and when should I use it?
A summary suit under Order XXXVII of the Code of Civil Procedure is a fast-track money suit for a clear debt on a written contract, bill or invoice. The defendant cannot defend as of right and must first get the court's leave by showing a real defence, which makes it quicker than an ordinary suit for undisputed dues.
Can an MSME recover dues faster than a civil suit?
Yes, if it is a registered MSME supplier. Under the MSMED Act, 2006, a buyer must pay within the agreed period and in any case within 45 days, with interest for delay. The supplier can file a reference before the Micro and Small Enterprise Facilitation Council through the MSME Samadhaan portal, which tries conciliation and then arbitration.
Do I have to go to arbitration to recover dues?
Only if your contract with the client contains an arbitration clause. Where it does, the dispute usually must be referred to arbitration under the Arbitration and Conciliation Act, 1996, instead of a civil court. If there is no arbitration clause, use a civil suit or, for a registered MSME, the Samadhaan route.
What if the client paid by a cheque that bounced?
A dishonoured cheque given to pay a debt lets you proceed under Section 138 of the Negotiable Instruments Act, 1881. Send a demand notice within 30 days of the cheque return memo, and if the client does not pay within 15 days, file a complaint. This can run alongside your money suit.
How long does it take to recover unpaid dues?
It depends on the route and the court. A demand notice can bring payment in weeks. A summary suit is faster than an ordinary suit for a clear debt, the MSME Samadhaan route is designed to be quicker for registered small businesses, and arbitration timelines depend on the clause. Tracking every hearing closely avoids delays from missed dates.