Appointed date and Effective date are very important in any merger or amalgamation through a scheme of arrangement. Do you agree?

Appointed date and Effective date are two significant dates in any scheme of Merger and Amalgamation. Mention of an appointed date is mandatory for the schemes falling under Section 232 of the Companies Act, 2013. Schemes involving Merger or Amalgamation or division of undertaking are required to fix an appointed date. In 'Marshall Sons & Co. India Ltd. vs. ITO', it was held by the Hon'ble Supreme Court that every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place, and that such date may precede the date of sanctioning of the scheme by the Court, the date of filing of certified copies of the orders of the Court before the Registrar of Companies, and the date of allotment of shares, etc. It was observed therein that, the scheme, however, would be given effect from the transfer date (appointed date) itself. Section 232(6) of the Companies Act, 2013 states that the scheme shall be deemed to be effective from the 'appointed date' and not a date subsequent to the 'appointed date'. This is an enabling provision to allow the companies to decide and agree upon an 'appointed date' from which the scheme shall come into force. The 'Effective date' is the date when the amalgamation/merger is completed in all respects after having gone through the formalities involved, and the transferor company is dissolved by the Registrar of Companies and certified copy of the order for the scheme of compromise and arrangement is filed with ROC and all other required statutory authorities, if any.