How MSMEs in Chhattisgarh can recover delayed payments under the MSMED Act
A guide for micro and small suppliers in Raipur and Chhattisgarh — the 45-day rule, statutory interest and the Facilitation Council process.
Read article ↗Many business owners are surprised to learn that they cannot go straight to court in most commercial disputes. Since 2018, Section 12A of the Commercial Courts Act, 2015 has required pre-institution mediation first.
When does Section 12A apply?
It applies to suits on commercial disputes of the specified value (currently ₹3 lakh and above) that do not seek urgent interim relief. The Supreme Court has held the requirement to be mandatory, so a suit filed without it can be rejected.
How the process works
- The party files an application with the legal services authority designated for pre-institution mediation. In Chhattisgarh, this means the State or District Legal Services Authority.
- The other side is notified and invited to the mediation.
- The mediation is expected to finish within three months, extendable by two months with consent.
- If the parties settle, the settlement has the same status and effect as an arbitral award.
- If it fails, a non-starter or failure report is issued, and you can then file the suit.
Why it can work in your favour
- Speed: months instead of years.
- Cost: far lower than a full trial.
- Privacy: discussions are confidential.
- Relationships: long-term suppliers and customers often stay in business together.
When you can skip it
If you genuinely need urgent interim relief, such as an order to stop a breach or freeze assets, you can approach the court directly. Courts look closely at whether the urgency is real.
Practical tips
- Bring the key documents to the first session.
- Decide your settlement range in advance.
- Have counsel review any settlement before you sign, because it will be binding.
This article is general information, not legal advice. For advice on your situation, please contact us.