How Long Does an MSME Facilitation Council Case Take?

What the Act actually says about time

Section 18(5) of the Micro, Small and Medium Enterprises Development Act, 2006 is short. Every reference to the Micro and Small Enterprises Facilitation Council is to be decided within 90 days from the date it's made. That's all. It's the only time limit the Act puts on the whole council process, and it covers both halves of it: conciliation under Section 18(2), and arbitration under Section 18(3) if conciliation fails.

Treat 90 days as a target. Nothing in the section says what happens when the council misses it. The reference doesn't end. You don't get an automatic award. And the buyer can't simply walk off. Because the section carries no consequence, High Courts have called it directory rather than mandatory, which in plain words means the council should try to finish in 90 days but doesn't lose its power to decide when it fails to.

So how long does a council case really take? If the buyer accepts the dues and pays at conciliation, two to four months is realistic. If it disputes the claim, raises objections on jurisdiction or registration and then defends the arbitration, a year or longer is common in Delhi NCR. Sometimes two years. These are ranges we've seen in practice, not promises, and every council keeps its own pace.

How long each stage usually takes

Is the 90-day rule binding on the council?

Not in the way most suppliers hope. In MDD Medical Systems (India) Pvt Ltd v. Delhi International Arbitration Centre (Delhi High Court, April 2025), the court held that the council's mandate doesn't end just because the reference wasn't decided, or wasn't sent to arbitration, within 90 days. Section 18(5), it pointed out, prescribes no consequence for crossing the period. The Calcutta High Court and the Bombay High Court have taken the same directory view in separate cases.

That cuts both ways. A buyer can't get an award quashed only because it came after day 90, and that protects suppliers whose cases have dragged. But you can't treat day 91 as the council defaulting and run to a civil court for the same money either. What do you do when the file has gone quiet for months? Write to the Member Secretary asking for an early date. Send a representation to the state industries department that runs the council. And if the case has genuinely stalled, a writ petition can ask the High Court to direct the council to decide within a fixed time.

The arbitration stage throws up a separate argument. Once conciliation fails, Section 18(3) applies the Arbitration and Conciliation Act, 1996 as if the parties had an arbitration agreement. Arguably that pulls in Section 23(4), which expects pleadings to finish within six months of the tribunal entering on reference, and Section 29A, which asks for an award within twelve months of completed pleadings. The High Courts haven't agreed on how Section 29A sits with the council's own 90 days. So we use both as pressure points at hearings. Not as fixed deadlines. For how that clock runs in an ordinary arbitration, see our post on Section 29A and how long arbitration takes.

From filing to award, one stage at a time

Each stage moves at its own speed. Once you know which one you're in, you'll know what can be pushed and what can't.

1. Get the reference complete before you file

   You file on the MSME Samadhaan portal with the buyer's details, every unpaid invoice, the date the goods or services were accepted and the interest you're claiming. The first delay in most cases is also the easiest to avoid: the council sending the application back because papers are missing. Don't give it the chance. Our note on filing an MSME Samadhaan complaint online walks through the portal itself.

2. Registration and notice

   The Member Secretary scrutinises the application and lists it before the council. Notice then goes to the buyer by post or email with the first date. If the address in your papers is stale, the notice comes back unserved. You lose a date. Pull the buyer's current registered office from the MCA records before you file, not after.

3. Conciliation sittings

   The council hears both sides and tries for a settlement under Section 18(2), which brings in the conciliation provisions in Sections 65 to 81 of the Arbitration Act. The pattern is familiar. The buyer comes to the first sitting, asks for time to reconcile accounts and returns with a part offer. Two or three sittings is normal. Any more than that and the buyer is usually buying time.

4. Closing conciliation

   If nobody settles, the council records that conciliation has failed. It can't skip this. In Jharkhand Urja Vikas Nigam Ltd v. State of Rajasthan (2021) the Supreme Court set aside a council order made without going through the conciliation and arbitration stages properly. An order that cuts corners on Section 18 won't survive, however much it favours you on the day.

5. Arbitration, by the council or a centre

   The council either arbitrates itself or sends the dispute to an institution or centre that provides arbitration services. In Gujarat State Civil Supplies Corporation v. Mahakali Foods (2022) the Supreme Court held that the council may act as arbitrator even though it also handled the conciliation. Then come pleadings, evidence if the facts are in dispute, and final arguments.

6. The award, and after

   Under Section 36 of the Arbitration Act the award can be enforced like a civil court decree. The buyer can challenge it under Section 34. But Section 19 of the MSMED Act makes it deposit 75 percent of the awarded amount first. If nothing's filed in time, you can execute.

Why it nearly always runs past 90 days

Volume, first. Councils in industrial states get thousands of references, and the members hearing them usually have other official work as well. Commentary on government data published in 2026 put references on the Samadhaan system between April 2022 and February 2026 at close to 1.5 lakh. Roughly half were still pending at the end of that period. Those are national numbers. Delhi, Uttar Pradesh and Haryana each move at their own speed.

Then there's the buyer. A buyer that owes the money and is also staring at compound interest at three times the bank rate has every reason to slow things down. You'll see the same moves again and again. It wants time to reconcile accounts. It sends a junior officer with no authority to settle. It raises a jurisdiction objection late in the day, or files a writ in the High Court against some interim order of the council. Each of these can cost you one to three months.

Third, and this one stings, the supplier's own file. An application that doesn't show when the goods were accepted, lumps principal and interest together, or attaches a Udyam certificate dated after the purchase orders is asking for objections. Adjournments follow. In our experience a good share of avoidable delay goes back to papers the supplier could have fixed before filing.

Last, vacancies. Section 21 sets out who sits on the council, and when members aren't appointed, hearings slow down. The 2026 amendment rewrites the composition rules and lets states set up more councils. That should help over time. It won't shorten a case that's already pending.

Objections that cost you months

• Jurisdiction. Under Section 18(4), the council where the supplier is located has jurisdiction. Out-of-state buyers like to argue that your real place of business is somewhere else, or that an exclusive jurisdiction clause in the purchase order applies. Our post on which council has jurisdiction sets out the tests.
• Registration date. If your Udyam registration came after the purchase order, expect an objection built on Silpi Industries v. Kerala SRTC (2021). In NBCC (India) Ltd v. State of West Bengal (2025) the Supreme Court took a different view and referred the question to a larger bench, which hadn't decided it when we wrote this. The Delhi High Court followed the NBCC view in October 2026. More in whether a later Udyam registration still helps.
• Category. Section 18 is only for micro and small enterprises. If your turnover has grown, the buyer may say you were already medium-sized when you supplied. Keep your Udyam certificate history to hand.
• What you're claiming. The council deals with amounts due under Section 17, which is the price of goods or services plus interest. Throw in damages, lost profit or a security deposit you want back, and you'll spend hearings arguing over whether the council can hear it at all.
• Limitation. Once the case is in arbitration, the Limitation Act applies. The Supreme Court said so in Sonali Power Equipments v. Maharashtra State Electricity Board (2025). Your oldest invoices get attacked first. Our post on the time limit for an MSME delayed payment claim goes through it.
• Counter claims. The buyer can bring its own claim in the arbitration, say for short supply or penalties. That's another round of pleadings and evidence.

How long conciliation takes, and whether to settle there

Most suppliers underrate conciliation. It usually takes two to six months. And for a buyer that really does owe the money but is stuck on internal approvals, it's where payment actually happens. A purchase head who can't sign off interest without a legal reason can often sign off a settlement recorded before a statutory council.

A conciliation settlement has the status of an arbitral settlement agreement under Section 74 of the Arbitration Act. You can enforce it like an award. That's quicker than any contested route. The price is that you'll usually give up part of the interest, and whether that's sensible depends on how good your papers are and how badly you need the cash now. If your proof of acceptance is thin, settling may be wise. If you've got signed delivery challans and a ledger the buyer has admitted, you can afford to hold out.

Don't let it drift. If the buyer wants a third or fourth adjournment and still hasn't put a concrete offer on the table, ask the council to record that conciliation has failed and move to arbitration. What actually goes on at the sittings is covered in our post on how MSME conciliation works before arbitration.

If the council sends your case to an arbitration centre

Section 18(3) lets the council either arbitrate itself or refer the dispute to an institution or centre providing alternate dispute resolution services. Delhi councils have sent cases to the Delhi International Arbitration Centre (DIAC) at the Delhi High Court, as a Delhi High Court judgment of October 2026 involving a Delhi council shows. Elsewhere, councils use state arbitration centres or institutions on their own lists.

A referral adds a step at the start. The centre has to register the case, appoint an arbitrator from its panel and take the arbitrator's disclosure under Section 12. Allow a few weeks to a couple of months for that. From then on the centre's own rules and timelines apply. They're often steadier than a council's. The arbitrator has one job on your file, and it shows.

Costs change too. A centre charges arbitrators' fees and administrative costs on its own schedule, usually linked to the amount in dispute. Ask early who pays and how the deposits are split. If you're comparing the council route with DIAC in particular, the commercialcourtlawyer.com guide on DIAC arbitration or the MSME council puts the two side by side.

Will the MSMED (Amendment) Act, 2026 speed things up?

It will change the timelines, once the relevant parts are in force. Parliament passed the Micro, Small and Medium Enterprises Development (Amendment) Act, 2026 in August 2026, and it was published as Act 16 of 2026. The new Section 18 replaces conciliation with mediation under the Mediation Act, 2023. It also sets three separate clocks. Mediation is to finish within 90 days from the date fixed for first appearance. If it fails, the reference to arbitration must follow within 30 days. And the award is due within 90 days from completion of pleadings.

There's more in it. Jurisdiction is fixed at the supplier's registered address. Mediation and arbitration can be held online. A new Section 18A lets awards be recovered as arrears of land revenue. And Section 19 is rewritten so that, where a buyer's challenge has been pending for more than six months, the court must release at least 50 percent of the awarded amount to the supplier.

But there's a catch. The Act lets the government bring different provisions into force on different dates. Some of them, such as the new registration and classification rules, were reported to be in force from 15 October 2026. As of late October 2026 we haven't seen a notification bringing the new Section 18, Section 18A and Section 19 into force, so pending and fresh references still run under the existing Section 18. Check the current notification before you rely on the new timelines. And even when they apply, the new periods carry no stated consequence for delay either. Expect the directory argument all over again.

From award to money in your account

An award isn't money in the bank. Once the buyer receives it, it has three months to file a petition under Section 34 of the Arbitration Act, plus up to 30 more days if it shows sufficient cause. Not a day beyond. If no petition comes in that window, the award becomes enforceable as a decree and you can file for execution in the civil court.

If the buyer does challenge, Section 19 of the MSMED Act makes it deposit 75 percent of the awarded amount before the court will even entertain the petition. Courts have been strict about this. Frankly, it's the biggest single reason suppliers like the council route. The court can let you withdraw part of the deposit while the challenge is pending, on terms. The Section 34 hearing itself often takes a year or more in a busy commercial court, and an appeal under Section 37 can follow.

Where execution is needed, it runs under Order XXI of the Code of Civil Procedure: attaching bank accounts, receivables and property. In Rahul S. Shah v. Jinendra Kumar Gandhi (2021) the Supreme Court directed that execution ordinarily be decided within six months. Practice varies. For the rest of this stage, read what happens after an MSME council award and whether a buyer can challenge a council award.

Three ways the same unpaid bill can play out

Which council and which court, if you're in Delhi NCR

Under Section 18(4), the council is picked by where the supplier is located. Each state and union territory sets up its own councils under Section 20. Delhi's councils have been organised district-wise with the district administration involved, and the Samadhaan portal routes your application to the council for your address. Uttar Pradesh and Haryana also run more than one council, by region or division. So a unit in Noida or Ghaziabad, and one in Gurugram or Faridabad, will each land before the council covering its own district. Check the current list on the state industries department website before you file.

After the award, Section 10 of the Commercial Courts Act, 2015 sends challenges to awards, and their execution, in commercial disputes of specified value to the Commercial Court. In Delhi, larger amounts go to the Commercial Division of the Delhi High Court. In Uttar Pradesh and Haryana it's the court designated as Commercial Court for the district. The court with jurisdiction over the seat of the council's arbitration usually hears the challenge.

Location affects speed as well. Say you're in Delhi and your buyer is in Pune. The case is heard in Delhi, but serving notice and executing the award will involve Maharashtra. Plan for that at the start. Finding out after the award is the expensive way.

Papers that keep the case moving

• Your Udyam certificate, showing when you first registered and your category in each year that matters
• The purchase orders, work orders or contract that set out the payment period
• GST tax invoices, numbered and listed date-wise
• Delivery challans, e-way bills, GRNs or completion certificates, anything that shows the buyer accepted the supply
• The buyer's ledger from your books, plus any balance confirmation they signed
• Emails or letters where the buyer admits the dues, complains about something, or asks for more time
• Bank statements showing each part payment you got against the invoices
• An interest sheet done invoice by invoice: principal, due date and Section 16 interest
• A board resolution or authority letter for whoever signs and appears for you
• A Section 63 certificate under the Bharatiya Sakshya Adhiniyam, 2023 for the emails and electronic records you're relying on

What a supplier can do to shorten the case

Start with your own file. It's the one part of the timeline you control. Before anything is uploaded, Advocate B.K. Singh has the invoice schedule matched line by line against the delivery proof and the buyer's ledger. A council that sees a clean schedule with acceptance dates rarely needs more than one sitting to understand the claim, and the buyer has much less room to ask for time to reconcile.

Next, send someone to every date who can actually decide. Councils notice which side turns up ready. When the buyer wants an adjournment, ask for a short next date and ask the council to record that the buyer sought time. Those recorded adjournments matter later, for costs and for any writ or representation about delay.

Then push the case into arbitration once conciliation is plainly dead. Two sittings without a real offer is usually enough. Being too polite here can cost you four or five months.

Finally, keep the claim to what the council handles well: principal and Section 16 interest on clear invoices. Mixing in damages, disputed extra work or unrelated claims just hands the buyer material for objections. Those can go in a separate claim if they're worth chasing. If speed matters most and the buyer is a company with an undisputed debt above the insolvency threshold, read our post on when an MSME can go to insolvency instead of the council.

Buyers, PSUs and service suppliers

Buyers usually want the opposite of what suppliers want. Still, a buyer with a genuine quality or quantity dispute gains very little from delay. Section 16 interest is compounded with monthly rests at three times the RBI bank rate, and it keeps running until payment. Section 23 also makes that interest non-deductible for income tax. If your defence is weak, settling early at conciliation usually costs less.

Government departments and PSUs tend to be slow at conciliation, because any settlement needs internal sanction. But they don't vanish. Once a payment is approved, it comes. Expect more adjournments at the start and fewer headaches at execution.

Service suppliers (IT, maintenance, logistics) carry one extra problem, which is proving the services were accepted. Goods come with challans and GRNs. Services often have only emails and timesheets. Gather sign-offs, completion certificates and acceptance emails before you file, so the arbitration doesn't turn into a long fight over evidence.

What to do this week if your money's stuck

List every unpaid invoice with its acceptance date and due date, and find the oldest. That date matters. Limitation will decide how much of the claim survives if this goes to arbitration. Print your Udyam certificate and check its date against your first purchase order. Ask the buyer's accounts team for a signed balance confirmation. It helps on limitation, and it often prompts an offer.

If you've already filed, check the status on the portal, and write to the Member Secretary if the case hasn't been listed in two months. If conciliation is stuck, ask for termination and arbitration at the next sitting. If you have an award, diarise the 3-month challenge window and keep the execution petition ready for the day it closes. For the bigger picture, start with our overview of what the MSME Facilitation Council is and how it works.

If you'd like someone to go through your invoices and the council's order sheet before the next date, or you want to hear when the amendment's new timelines come into force, Advocate B.K. Singh's team can be reached through the contact page.