Client Stopped Answering Calls After Delivery? How to Legally Recover Unpaid Invoices in India

1. The Short Answer

2. No Signed Contract? Your Everyday Paperwork Is Your Case

The most common worry we hear is “we never signed a proper agreement.” That rarely matters. Under the Indian Contract Act, 1872, a contract can be formed by a purchase order, an email, a WhatsApp message or a phone call followed by delivery. What a court needs is proof that (a) the client ordered, (b) you delivered, and (c) the amount is unpaid. Most businesses already have all three.

Emails and WhatsApp chats are electronic records. They are admissible in Indian courts under the Bharatiya Sakshya Adhiniyam, 2023, which replaced the Indian Evidence Act. When you file them, they must be accompanied by the certificate required under Section 63 of that Act. Export the full chat with dates, and do not delete anything from your phone or mailbox. Read more on whether email and WhatsApp count in court.

3. Step 1: Send a Lawyer's Demand Notice

Before the notice, send one last written reminder by email and WhatsApp with the invoice numbers, the total due and a firm date. Keep it polite. If that date passes, it is time for a formal demand notice on an advocate's letterhead.

A good unpaid-invoice notice states:

• who ordered what, when, and at what agreed price;
• each invoice number, date, amount and due date, with delivery proof referred to;
• part-payments received and the exact balance;
• interest claimed (the contract rate, or the MSME rate if it applies, see below);
• a deadline, usually 7 to 15 days; and
• what you will do next if unpaid: mediation, a recovery suit, and costs.

Serve it at the client's registered office or GST principal place of business by Speed Post, and also on their official email and WhatsApp. Keep the postal tracking, email delivery records and read receipts. A notice from a lawyer changes the conversation: the accounts team can no longer treat your bill as “pending approval,” and the client knows the next document will come from a court.

If you want to move today, you can send a lawyer-drafted unpaid invoice recovery notice on LegalRecovery.in, our online notice service, which delivers it by email, WhatsApp and Speed Post.

4. Pressure Points Most Vendors Miss

Your notice gets paid faster when it reminds the client what non-payment costs them. Check which of these apply to you:

The client's GST input tax credit

Under the CGST Act and Rule 37 of the CGST Rules, a buyer who has not paid the supplier within 180 days of the invoice date must reverse the input tax credit claimed on that invoice and pay interest. For a large unpaid bill this is real money for the client's finance team, and pointing it out to the CFO or accounts head often speeds up release.

MSME interest, if you are Udyam-registered

If you were registered as a micro or small enterprise when you supplied, the MSMED Act, 2006 requires the buyer to pay within the agreed date, which cannot exceed 45 days (or within 15 days if no date was agreed in writing). After that, the buyer owes compound interest with monthly rests at three times the RBI bank rate. You can also file a claim before the MSME Facilitation Council through the Samadhaan portal (see our MSME 45-day payment recovery guide). For buyers who are businesses, Section 43B(h) of the Income Tax Act stops them from deducting unpaid dues to micro and small enterprises as an expense in that year, so they pay more tax. This tax rule covers manufacturers and service providers registered as micro or small, not traders.

A cheque that bounced

If the client gave you a cheque that was dishonoured for insufficient funds or “payment stopped,” you also have a criminal remedy under Section 138 of the Negotiable Instruments Act. The deadlines are strict: a written demand notice within 30 days of the bank's return memo, then a complaint within one month after the 15-day payment window ends. See our cheque bounce notice guide.

5. Step 2: Pre-Institution Mediation (Claims of ₹3 Lakh or More)

Most unpaid invoices between businesses are “commercial disputes” under the Commercial Courts Act, 2015. If the claim is ₹3 lakh or more and you are not asking the court for urgent interim relief, Section 12A requires you to try pre-institution mediation before filing a suit. The Supreme Court confirmed in Patil Automation v. Rakheja Engineers (2022) that this step is compulsory.

You apply to the District Legal Services Authority. The client is called to a mediation, which must normally finish within three months (extendable by two months with consent). The fees are modest and set under the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018. A settlement reached here has the same force as an arbitral award, so it can be enforced like a court decree. If the client does not turn up, you receive a non-starter report and can go straight to court.

If your contract or purchase order has an arbitration clause, the dispute may go to arbitration instead of court. See our arbitration services.

6. Step 3: Fast-Track Recovery Suit

If mediation fails, you file a money recovery suit. For claims of ₹3 lakh or more it goes to a Commercial Court, which works to fixed timelines: the defendant gets at most 120 days to file a written statement, and judges are expected to finish cases faster than ordinary civil suits.

Where your claim rests on a written contract, invoices the client accepted, or a written acknowledgement of the debt, your lawyer may file a summary suit under Order 37 CPC. In a summary suit the client cannot simply deny and delay: they must ask the court for “leave to defend” and show a genuine defence, often only on the condition that they deposit part of the money. Courts decide case by case whether bare invoices qualify, so the choice between an ordinary and a summary suit is a judgment call for your advocate. LegalRecovery.in has a detailed explainer on how an Order 37 summary suit works for money recovery.

Claims below ₹3 lakh go to the ordinary civil court, where a summary suit is also available. In the suit you can claim the principal, contractual or MSME interest, and costs. Under Section 34 CPC the court also decides interest from the date of filing until payment.

7. Claims of ₹1 Crore or More: The Insolvency Route

If a company owes you ₹1 crore or more, you may be able to send a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 as an “operational creditor.” The company has 10 days to pay or point out an existing dispute. If it does neither, you can apply to the NCLT to start insolvency proceedings, which puts the company's management at risk, so solvent companies tend to take this notice seriously.

Use this route carefully. The Supreme Court held in Mobilox Innovations v. Kirusa Software (2017) that if a genuine dispute about the debt existed before the notice, such as written quality complaints, the application will be rejected. It suits clear, undisputed dues, not quarrels about the work. Our guide on legal action when a company is not paying your bill explains this route step by step.

8. Mistakes That Weaken Your Case

• Threatening a police case for a simple non-payment. Courts treat an unpaid bill as a civil dispute. A cheating complaint works only if there was fraud from the start, and a false threat can backfire.
• Posting the client's name on social media or calling their staff repeatedly. This invites defamation or harassment claims and distracts from your case.
• Agreeing to vague “full and final” settlements on calls. Get any settlement in writing, with dates and amounts.
• Losing evidence. Keep original invoices, challans and phones. Do not clear WhatsApp chats.
• Waiting too long. See the time limit below.

9. How Long You Have

Under the Limitation Act, 1963, you generally have three years from the date payment fell due to file a recovery suit. A written acknowledgement of the debt signed by the client before that period ends restarts the clock (Section 18), and so does a part-payment (Section 19). Do not let an invoice sit for years: evidence fades, and companies change hands or close.

10. Frequently Asked Questions