Chapter V - Delayed Payments to Micro and Small Enterprises
Section 17
Section 17: recovery of amount due
Section 17 makes the buyer liable to pay the amount due for goods supplied or services rendered by the supplier, together with interest as provided in section 16.
On this page
Need advice on Section 17?
This article is for general information. Refer to the Micro, Small and Medium Enterprises Development Act, 2006 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the amount with interest thereon as provided under section 16.
Introduction
This short provision links the unpaid amount with statutory interest. It does not itself set out how a dispute is resolved; section 18 deals with references to the Micro and Small Enterprises Facilitation Council.
Key takeaways
Principal and interest together
The buyer's liability covers the amount due plus interest under section 16.
Prove the underlying supply
Delivery or service records, payment terms and the account statement are still needed to show what is due.
Reconcile what was supplied and what is unpaid
Match the contract or purchase order, delivery or service record, invoice, debit and credit notes and receipts. Separate undisputed principal from contested items.
Add section 16 interest correctly
Use the section 15 deadline and the section 16 start date and rate. Show the interest working instead of a single unsupported total.
Check the dispute route separately
Section 18 lets either party refer a dispute about an amount due under section 17 to the Facilitation Council. The Mediation Act, 2023 (section 62) substitutes section 18 only once that provision is brought into force, and no commencement for it has been located; the 2026 Amendment Act will also amend section 18 once it commences. Confirm the procedure in force on the date you file.
Status of the 2026 amendment
The Micro, Small and Medium Enterprises Development (Amendment) Act, 2026 (No. 16 of 2026) received the President's assent on 13 August 2026. Under its section 1(2) it comes into force on dates the Central Government notifies in the Official Gazette, and different provisions can start on different dates. When this page was checked on 11 October 2026, we had not found a commencement notification, so this page describes the law as it stood before that Act. The 2026 Act does not change section 17. Check the Gazette for a commencement notification before relying on any 2026 change.
Official sources
Practical checklist
Do
- Keep proof of supply and acceptance.
- Maintain an invoice-by-invoice payment ledger.
- Show the interest calculation separately from principal.
Avoid
- Do not assume every invoice is undisputed or that interest on all of them starts on the invoice date.
Frequently asked questions
Does section 17 itself set the procedure for recovering dues?
No. It states the buyer's liability for the amount and section 16 interest. The reference to the Facilitation Council is in section 18, which should be checked separately for the version in force.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026