One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: A freelancer can independently claim payment from the MSME agency under their working arrangement. Direct recovery from the dealership is difficult unless a separate contractual link exists. Sending a detailed legal notice to the agency is the first step, followed by a civil recovery suit if needed.
Rohan Gupta, a freelance videographer, wrapped up a glossy marketing campaign for a Bajaj Auto dealership in Indore last October. He’d shot, edited, and delivered all the content. The dealership loved it—used it across social media and in-store displays. But the invoice, roughly ₹45,000, was routed through Ananya Media Services, an MSME-registered agency Rohan had worked under for six months. The problem? Months went by, and Ananya Media simply didn’t press the dealership for payment. Rohan’s repeated WhatsApp messages and calls met with vague replies: “We’re following up,” or “Bajaj hasn’t cleared it yet.” His own dues stalled. Frustrated, Rohan initially consulted a general practice advocate who suggested waiting for the agency to act. That didn’t help. Then he approached the Chamber of Advocate Sudhir Rao, Supreme Court of India, where the approach shifted immediately. Advocate Sudhir Rao’s office identified that the true legal relationship was between Rohan and the agency—what mattered was establishing the implied contract through six months of prior course of dealings, email threads, and bank transfer records. The dealership was a third party with no direct obligation to Rohan. A stern demand notice under Section 80 of the Civil Procedure Code, 1908 was dispatched to Ananya Media Services, clearly itemizing the unpaid professional fees and citing breach of contract. Within three weeks, the agency released the full amount, acknowledging its own liability. The dealership settled its own bill with the agency shortly after. The domain-specific strategy—mapping the contractual chain precisely and targeting the right defendant—secured the client’s money without prolonged litigation.Key Facts of the Case
- The freelancer produced video and photo content for a Bajaj Auto dealership’s promotional campaign.
- All work was accepted and used by the dealership without any quality dispute.
- The invoice was issued by Ananya Media Services, an MSME-registered entity, to the dealership.
- For six months, the freelancer had consistently received payments from the agency after the agency cleared dealership invoices.
- The agency refused to pursue payment from the dealership, blocking the freelancer’s compensation.
- No direct written contract existed between the freelancer and the dealership; the freelancer’s arrangement was solely with the agency.
- Advocate Sudhir Rao’s office used the freelancer’s consistent course of dealings with the agency to establish an implied contract, leading to a quick recovery.
The Direct Legal Answer
Here’s what the law permits when you’re a freelancer stuck between an unpaid client and an uncooperative agency.
Can I send a legal notice or claim directly against the dealership?
Ordinarily, no. The dealership’s contract is with the agency, not with you. Unless you have a written agreement or a clear direct promise from the dealership to pay you personally, you lack what lawyers call “privity of contract.” The agency holds the right to recover the invoice. But if the dealership used your content without the agency’s payment, a claim for unjust enrichment under Section 68 of the Indian Contract Act, 1872 sometimes becomes possible—still, it’s a steep hill. Direct your notice at the agency instead.
What if the agency is withholding my payment despite completed work?
You have a clean claim against the agency. Your relationship, even if informal, is a contract for services. The Indian Contract Act, 1872, says that when you perform your part, the other party must perform theirs. Ananya Media’s failure to pay—whether or not it got paid by Bajaj—breaches that contract. You can send a demand notice and file a civil suit for recovery under Order 37 of the Civil Procedure Code, 1908 (summary suit) if the amount is a liquidated debt.
The agency is MSME-registered but won’t use the MSME recovery process. Can I?
You cannot invoke the MSME Samadhaan portal or the delayed payment provisions under the MSMED Act, 2006 because you aren’t the supplier to the dealership. Only the agency can file a complaint with the MSME Facilitation Council. Your remedy is to compel the agency to act by pressuring it through a legal notice and, if needed, a suit. The MSME tag of the agency doesn’t give you direct access to that statutory mechanism.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Preserve every scrap of communication—WhatsApp chats, emails, call recordings, even screenshots of the dealership using your content. These establish the implied contract. And don’t accept the whole “the main client hasn’t paid me” excuse. The agency’s obligation to pay you isn’t conditional on receiving payment from a third party, unless your contract explicitly says so.
This class of matter—freelancer payment disputes layered through an intermediary—involves careful evidence mapping and precise defendant selection. General practitioners sometimes misdirect notices at the wrong party, causing delays. Engaging an advocate who regularly handles contractual recoveries ensures the target is correct and the notice sticks.
Applicable Sections of Law
- Section 68, Indian Contract Act, 1872: Claim for compensation when a person enjoys benefit of a non‑gratuitous act.
- Section 73, Indian Contract Act, 1872: Compensation for loss or damage caused by breach of contract.
- Order 37, Civil Procedure Code, 1908: Summary procedure for recovery of liquidated demand like an unpaid invoice.
- Section 80, Civil Procedure Code, 1908: Requirement of a legal notice before suing certain public entities—useful template for demand notices even in private matters.
Limitation Period
The clock starts ticking from the date the payment became due. For a contract‑based recovery, the limitation period is three years under Article 55 of the Limitation Act, 1963, or it could be three years from the date of work completion under Article 18 if it’s treated as a suit for price for work done. If the agency acknowledged the debt in writing or made a part payment, the limitation period resets. Missing this deadline can be fatal, so don’t wait. Courts do have condonation powers, but deliberate delay is hard to excuse.
Interim Reliefs Available
While a civil suit is pending, you can apply for attachment before judgment under Order 38 Rule 5 of the Civil Procedure Code, 1908 if you show the agency is trying to dispose of its assets or delay. A temporary injunction under Order 39 Rules 1 and 2 CPC may stop the agency from dissipating funds received from the dealership. These interim measures are crucial because they preserve the status quo and prevent the defendant from making itself judgment‑proof while the case drags on.
If You Are the Victim
- Send a formal legal notice through an advocate—it often shakes money loose without court.
- Collect every proof of the agency‑freelancer relationship: past payment records, messages, email trails.
- Don’t let the agency blame the dealership; that’s its problem, not yours.
- File a summary suit under Order 37 CPC if the amount is clear and undisputed—this compels a quick response.
- Never threaten or use abusive language; it can weaken your civil case.
Documents You Must Keep Ready
- Identity proof (Aadhaar, PAN).
- All written communications: emails, WhatsApp export, text messages.
- Records of past payments received from the agency (bank statements).
- The informal or formal agreement under which you worked.
- Screenshots or URLs where the content was published or used by the dealership.
- Invoice copies, even if raised by the agency—they prove the commercial context.
- Any acknowledgement of debt or promise to pay by the agency.
What Evidence Is Required?
- Proof of work delivered—file transfers, cloud links, delivery confirmation emails.
- Evidence the content was used—social media posts, website screenshots, in‑store photos with timestamps.
- Correspondence with the agency about the project’s scope, rate, and delivery.
- Bank statements showing earlier payments from the agency in similar freelance arrangements.
- Witness statements from team members or other freelancers who collaborated on the same project, if any.
- Call detail records or call recordings (with consent) where the agency acknowledged the dues.
- The agency’s own invoice to the dealership, if accessible, can reinforce the chain.
How Courts Typically Approach Such Cases
Civil courts in India tend to view freelancer‑intermediary disputes pragmatically. Once the plaintiff demonstrates a clear course of dealing—regular work, accepted deliverables, a pattern of payment—the court infers an implied contract. The agency’s argument that it wasn’t paid by the end client usually fails unless there’s an express pay‑when‑paid clause. Judges are also mindful of unequal bargaining power and won’t hesitate to award interest under Section 34 CPC from the date the payment fell due. The process is slower than one hopes, but a well‑drafted summary suit can secure a decree in under a year if the defendant has no genuine defence.
Timeline of Legal Process
- Legal notice: 15‑30 days for reply, often the matter settles here.
- Filing of summary suit: Plaint drafted and filed before the appropriate civil judge.
- Summons: Defendant gets 10 days from service to enter appearance and, if leave to defend is sought, another 10 days to file an affidavit.
- Leave to defend: Court decides if the defendant has a triable issue; if not, decree within 2‑3 months from service.
- If leave granted: Written statement, issues framing, evidence, arguments—could take 12‑18 months.
- Execution: After decree, filing execution petition to recover money can take another 3‑6 months.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Yes, and it often should be. Mediation and conciliation are promoted by courts under Section 89 CPC. A freelancer can initiate a structured negotiation through their advocate, offering a discount for early payment in exchange for dropping the threat of litigation. Even after a suit is filed, parties can refer the matter to a Lok Adalat or a private mediator. Settlement saves time and preserves professional relationships. In Rohan’s case, the notice itself triggered a settlement; no courtroom appearance was needed.
Common Mistakes People Make
- Waiting too long, thinking the agency will eventually pay—limitation keeps ticking.
- Sending informal WhatsApp threats instead of a structured, legally sound demand notice.
- Failing to preserve original communication records; screenshots alone can be challenged.
- Assuming the dealership owes them directly and wasting energy on the wrong party.
- Engaging a lawyer who doesn’t regularly handle contractual recovery—such cases demand a firm grasp of summary suit procedure, Order 38 attachments, and evidence mapping that a general practice lawyer might overlook.
- Accepting part payment without a written memorandum that acknowledges the principal debt, thus inadvertently restarting limitation but without a clear written acknowledgement.
FAQs People Normally Have
Can I file a police complaint for non‑payment?
Generally no, unless there’s evidence of cheating or criminal breach of trust. Simple breach of contract is a civil wrong, not criminal. An FIR under Section 318 BNS may lie if there was fraudulent intent from the start, but that’s rare in such freelance disputes.
Do I need a written agreement to sue?
Not necessarily. An oral contract backed by conduct and documentary evidence is enforceable. Bills, messages, and payment history are enough. Courts recognise implied contracts under Section 9 of the Indian Contract Act.
What if the agency shut down or is avoiding notice?
You can serve notice through substituted means—publication in a newspaper, or pasting it at its last known address—with court permission. Then proceed ex‑parte. It’s harder, but not impossible.
Will the MSME tag help me in any way?
Only indirectly. You can’t use the MSMED Act yourself. But mentioning the agency’s MSME registration in your notice can add pressure, because MSMEs have reputational concerns and easier statutory recovery options they might not want triggered against them.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India