The Ministry of Corporate Affairs vide General Circular No. 09/2019 dated 21st August, 2019 clarified the Ministry’s stand on interpretation of Section 232(6) of the Companies Act, 2013 (Act) dealing with the concept of ‘Appointed Date’.

However, before we get into the intricacies of the circular and the clarification it offers, it is very much required to have a look at Section 232(6) of the Act.

Section 232(6) of the Act reads as under:

Merger and Amalgamation of Companies


(6) The scheme under this section shall clearly indicate an appointed date from which it shall be effective and the scheme shall be deemed to be effective from such date and not at a date subsequent to the appointed date.


The thrust of Section 232(6) of the Act lies in selection of an appointed date and its inclusion in the Scheme to be filed under Section 232 of the Act. The Scheme cannot be deemed to be effective from a date later than the appointed date i.e., to say the Scheme shall be effective from the appointed date and in no case later than the appointed date.

The Ministry vide aforesaid Circular had tried to address the following concerns of the Industry and also the professional community at large:

1. Whether it is mandatory to indicate a specific calendar date as ‘appointed date’ in the Scheme filed under Section 232 of the Act; and

2. Whether ‘acquisition date’ for the purpose of Ind-AS 10 (Business Combinations) would be the ‘appointed date’ referred in Section 232 of the Act.

The Ministry while addressing the aforesaid noted that the companies file Scheme under Section 230-232 of the Act indicating ‘appointed date’ which is either a specific calendar date or an event based date. The ‘appointed date’ is mutually agreed between the parties to the Scheme. The Ministry has also noted that Section 232(5) of the Act requires the filing of a certified true copy of the order on the Scheme with the Registrar of Companies (RoC) for registration with a period of 30 (thirty) days of the receipt of the certified true copy of the order.

The MCA has cited reference to the decision / judgment of the Hon’ble Supreme Court of India in the matter of Marshall Sons & Co. India Ltd. vs. ITO [223 ITR 809], wherein the Hon’ble Supreme Court has held that every Scheme must necessarily provide for a date w.e.f. which the amalgamation / transfer shall take place. The selected date may precede the date of sanctioning of the Scheme, the date of filing of the carried copy of the order with the RoC etc. The Scheme, however, shall be given effect from the appointed date.

The MCA has also placed reliance on the judgment of Hon’ble Madras High Court in the matter of amalgamation of Equitas Housing Finance Limited and Equitas Micro Finance Limited with Equitas Finance Limited [C.P. No. 119 to 121 of 2016], wherein the Hon’ble Madras High Court specifically rejected the argument that ‘appointed date’ in the Scheme should necessarily be a specific calendar date.

Here it is pertinent to note that Section 232(6) of the Act provides enough room to the parties to decide and agree upon an ‘appointed date’ from which the Scheme shall come into force.

The MCA has, placing reliance on the aforesaid, has clarified that:

1. Section 232(6) of the Act provides the companies involved enough opportunity to choose and mention in the Scheme an ‘appointed date’. The date can be a specific calendar date or a date tied to occurrence of an event or fulfillment of certain preconditions mutually agreed between the parties.

In case the ‘appointed date’ is a fixed calendar date, the same may precede the date of filing of the Scheme with the competent authority i.e., National Company Law Tribunal (NCLT). However, proper justification needs to be provided in the Scheme itself for selection of ‘appointed date’ ante-dated beyond a year from the date of filing of the Scheme. Further, such ante-dating of the ‘appointed date’ should not be against public interest.

Further, in case the ‘appointed date’ is contingent to the occurrence of any event etc., the event needs to be captured in the Scheme itself. However, in case the event is based on a date which is subsequent to the date of filing of the certified copy of the order with RoC, requisite intimation needs to be filed with the RoC within 30 days from the Scheme coming into force.

2. ‘Appointed date’ as provided for in the Scheme shall, for the purpose of Ind-AS 10 (Business Combinations), be deemed to the ‘acquisition date’ and the date of transfer of control for the purpose of conforming to the Accounting Standards.


The Ministry has vide the aforesaid Circular dated 21st August, 2019 provided requisite clarification on the issues surrounding the concept of ‘appointed date’ and the clarification from the Ministry will surely benefit the Industry and the Professionals at large.

Disclaimer: The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. The Author of this Article do not constitute any sort of professional advice or a formal recommendation. The Author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove.

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October 2020