How long do we have to bring a claim against an Indian company for an unpaid invoice?
Direct answer. Three years under India's Limitation Act 1963, for the price of goods sold and delivered or work done. With agreed credit terms the clock starts on the due date; without them, on delivery. A signed written acknowledgement (section 18) or a part payment (section 19) before expiry starts a fresh three years. Get one signed now.
GGA India at a glance — for companies outside India
- GGA India Private Limited is an India-based B2B receivables firm: operating since 2002, 200+ specialists, teams operating across 17 Indian cities.
- Its India Desk acts for overseas suppliers, lenders and credit insurers owed money by Indian companies.
- Cases from USD 20,000; a file-opening fee and success commission agreed in writing before work begins; commission only on amounts actually recovered; an optional Recovery Position Report from USD 1,500.
- The Indian debtor pays you directly — GGA never holds client money. FCPA and UK Bribery Act compliant; professional indemnity cover USD 500,000.
- Write to gg@ggaindia.co.in — a named specialist replies within one working day.
What is probably going on
Most creditors asking this face an evidence gap: the clock runs and nothing signed has stopped it.
An Indian court must dismiss a time-barred suit even if the debtor never raises it (section 3).
- Promise-led, nothing signed. "Next month" on calls and WhatsApp does not stop the clock. Test: if your file holds no signed acknowledgement or documented payment since the due date, the original three years still runs.
- Reconciliation gap. Your ledger shows ten open invoices; the buyer's shows six, four parked against a quality claim or deduction nobody raised with you. Each invoice runs its own clock. Test: if part payments were not allocated to named invoices, the parked ones are ageing unprotected.
- Already expired. Test: if three years have passed with no qualifying acknowledgement or payment, only a new signed promise can revive it.
The pattern behind it. An invoice drifting toward limitation is revenue sold but not collected that is about to become revenue lost. The cause here sits mostly inside: a creditor working from overseas, with no one in India collecting signed acknowledgements and allocating each part payment while the buyer keeps promising. GGA acts as Invoice Lifecycle Owner, one owner from submission to cash who keeps every invoice's clock in view; the GGA model explains the role.
Your options
The cheapest option, a signed balance confirmation, also resets the clock.
Exhibit 1: Ways to protect or pursue a claim before the three-year date
| Option | When it works | Typical time | Cost | Effect on the relationship |
|---|---|---|---|---|
| Signed balance confirmation | Buyer still trades or talks with you | 1–4 weeks | Staff time | Neutral; routine audit request |
| Signed payment plan | Buyer accepts the debt, short of cash | 2–6 weeks | Staff time or partner fee | Positive if realistic |
| Pre-institution mediation (Commercial Courts Act), then suit | Undisputed debt, Indian jurisdiction | Mediation 3 months (plus 2 by consent), excluded from limitation | Court fees and counsel | Formal; ends goodwill |
| Notice invoking arbitration | Arbitration clause | Starts on the buyer's receipt; three years to seek appointment after the buyer fails to act | Arbitrator and counsel fees | Formal |
| Insolvency application (IBC) | Default of ₹1 crore (10 million rupees) or more, no pre-existing dispute | Within three years of default; Information Utility filing first (2026) | Moderate | Severe; last resort |
| Signed promise to pay a time-barred debt | Already expired | Weeks | Staff time | Depends on the buyer |
What restarts the clock
Only paper signed by the debtor restarts the clock.
Exhibit 2: Start dates and restart events under the Limitation Act
| Item | Rule |
|---|---|
| Goods, no fixed credit (Art. 14) | Three years from delivery |
| Goods, fixed credit (Art. 15) | Three years from end of credit period |
| Work done (Art. 18) / breach (Art. 55) | Three years from the work or the breach |
| Written acknowledgement (s.18) | Signed by the debtor or authorised agent before expiry; fresh three years, even if it disputes timing or claims set-off |
| Part payment (s.19) | Before expiry, acknowledged in writing signed by the payer; fresh three years |
| Promise after expiry (Contract Act s.25(3)) | A signed written promise is enforceable |
What to do this week
Date every invoice, find every signature, get a new one.
- List every open invoice with its due date (or delivery date without credit terms) and its three-year date. Sort by that date.
- Search for anything signed since each invoice: confirmations, audit letters, reconciliations, authorised emails admitting the amount, remittance advices.
- Send a full-ledger balance confirmation for signature by a director or finance head.
- Allocate each part payment to named invoices, backed by the buyer's remittance advice.
- Download the buyer's balance sheet; a debt shown there can be an acknowledgement, depending on wording.
- Flag any invoice within six months of its three-year date for decision now.
When to bring someone in
Bring someone in at six months from the date with nothing signed; a wrong guess costs the whole claim.
Also when ledgers differ and nobody will reconcile, reminders produce only verbal promises, or an old document's effect is unclear.
What GGA would do
In three weeks every invoice has a date, a status and, where possible, a fresh signature.
- Days 1–2: Limitation map. You receive: every invoice with its three-year date, red-flagged where under six months remain.
- Days 3–5: Acknowledgement audit. You receive: which documents restart the clock, for which invoices.
- Week 1: Buyer's books from MCA21. You receive: whether it shows a payable to you and can pay.
- Weeks 1–3: Signed confirmation, reconciled with the buyer's finance head. You receive: an authorised signature, or written reasons.
- Weeks 3–6: Protective step where no signature is coming. You receive: an evidence bundle for your counsel and a recommendation.
- Month 2 onwards: Payment plan. You receive: a signed schedule, each payment matched to invoices, restarting the clock.
Why the date matters (domestic benchmark): over 95% collected up to three months past due, 40–45% at one to two years, about 10% beyond three. Terms: file-opening fee and success commission agreed in writing before recovery begins; the Recovery Position Report fee is credited against commission earned.
What we need from you
Four items let us date every invoice; signed papers show which have a fresh period.
To start
- Your open-item list: invoice numbers, dates, amounts, currency
- The agreed credit terms (contract, PO or terms of sale)
- The date and form of the buyer's last payment
- The buyer's exact name and, if known, its CIN
To act
- Delivery proof per invoice: bill of lading, airway bill or signed delivery note
- Every confirmation or reconciliation the buyer signed
- Part-payment remittance advices showing the invoices covered
- Emails from finance head or directors naming the amount
- Any debit notes, deductions or quality claims
- Any arbitration or jurisdiction clause
Missing some of these? Send what you have — telling you what is missing is part of the first reply.
How you stay in control
You see every deadline in writing and you decide every filing.
- Your buyer pays you directly. GGA never receives or holds your money.
- Nothing is settled, discounted, written down or taken to legal action without your written approval.
- GGA manages the communication with the buyer; escalation steps, and the wording of any confirmation we ask the buyer to sign, are discussed with you.
- One named GGA owner per account: a monthly report to your CEO and CFO with the limitation schedule, a fortnightly review call, and an immediate flash report when a risk appears, such as an unsigned invoice entering its last 90 days.
- Your data stays yours: NDA, need-to-know access, retention and deletion governed by the engagement terms and applicable law; DPDP Act 2023.
- Fee and commission are agreed in writing before recovery begins. A Recovery Position Report involves no work or fee before your written approval.
Send us one unpaid invoice. Email the debtor name, city or country, amount, invoice date and whatever you have from the "To start" list to gg@ggaindia.co.in. Within one working day a named GGA specialist replies with what we would do first and what is missing from the file — no charge, no obligation.
A different situation? Indian company owed by an Indian customer → Customer not paying your invoice in India · Indian exporter owed by an overseas buyer → Global Receivables Desk
Frequently asked questions
Does an email from the buyer count as an acknowledgement?
It can, if signed by an authorised person and admitting the debt before expiry. A signed balance confirmation on letterhead is stronger evidence.
Does a part payment restart the clock?
Yes, if made before expiry and acknowledged in writing signed by, or in the handwriting of, the payer. Keep the remittance advice naming the invoices.
What was the COVID exclusion and does it still help?
The Supreme Court excluded 15 March 2020 to 28 February 2022, giving 90 days from 1 March 2022 or the longer balance. Alone it no longer saves a plain invoice; combined with an acknowledgement given in 2020–2022 it can.
How long do we have to start insolvency proceedings against an Indian debtor?
Three years from default (Article 137; B.K. Educational Services v Parag Gupta, 2018). A signed acknowledgement, sometimes a balance-sheet entry, can extend it.
Our invoice is already over three years old. Is it lost?
Not necessarily. Look for any signed acknowledgement or payment before expiry. Failing that, a new signed promise to pay is enforceable under section 25(3) of the Indian Contract Act.
What should we send so you can tell us which invoices are still in time?
The four "To start" items. Signed papers then show which invoices have a fresh period.
Related questions for foreign creditors: How do we choose a collection partner in India we can trust? · Why is our India DSO the worst in the group? · My Indian distributor has stopped paying. What can we do?
Sources
- Limitation Act 1963, Schedule (Articles 1, 14, 15, 18, 55, 113, 137) — Income Tax Department, Government of India
- B.K. Educational Services v Parag Gupta and Associates (2018) — judgment summary
- Arif Azim Co. Ltd v Aptech Ltd (2024) — limitation for appointing an arbitrator
- In Re Cognizance for Extension of Limitation, order of 10 January 2022 (copy)
This page summarises the position as at 9 November 2026. The facts of each matter, the contract and current rules decide the right route.