Prahlad,
The implications of what you propose are many and I would simply write the customer off.

If you "kill" a customer for non-payment, that customar may/will badmouth you to the extent that you will get no new business, this happened to a friend of mine as follows (short form):
Friend to customer: the unit will not work becuse you have not paid
Customer to collegues: he sold me something that does not work so I will not pay and he refuses to fix it.

That customer spread the "he refuses to fix it" to the extent that my friend had to move and go back to regular employment.

Actually the "does not work and he refuses to fix it" was that the customer after the contract was fulfilled insisted on an additional feature for free.

Erik