NCLT Approves Cochin Aircraft Maintenance Company’s ₹87.75 Lakh Capital Reduction Following Shift to Consultancy Services [Read Order]

The National Company Law Tribunal (NCLT) Kochi Bench has approved Cochin Aircraft Maintenance Company Limited’s proposal to reduce its paid-up share capital under Section 66 of the Companies Act, 2013.

The company, originally engaged in aircraft maintenance and training, decided to discontinue aviation operations and shift to engineering consultancy, rendering its existing capital structure excessive.

The company, incorporated in 2005 by former Indian Naval engineers, initially engaged in aircraft maintenance, repair, and engineering training. However, the global aviation downturn in 2008, followed by the COVID-19 pandemic, rendered the business financially unviable.

Subsequently, Cochin International Airport Limited (CIAL) entered the same sector through its subsidiary, Cochin International Aviation Services Limited, making CAMCL’s operations redundant.

Owing to this, and the advanced age of its shareholders, mostly retired defence engineers, the company resolved to confine itself to consultancy and technical advisory services rather than capital-intensive aviation maintenance.

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As this transition required significantly lower capital, the board resolved to reduce the paid-up share capital to ₹25.83 lakh, returning the surplus ₹87.75 lakh to shareholders in proportion to their holdings.

The company asserted that it had no secured or unsecured creditors, no employees, and no outstanding loans or deposits, with auditor certificates substantiating these claims.

Pursuant to the Tribunal’s earlier direction, notices were served to statutory authorities, including the Registrar of Companies (ROC), Regional Director (RD), Directorate General of Civil Aviation (DGCA), Enforcement Directorate (ED), and the Income Tax Department.

The DGCA clarified that the petitioner was neither an approved Maintenance Repair Organisation (MRO) nor a Continuing Airworthiness Management Organization (CAMO), confirming it had no regulatory bearing on the petition.

The ED reported no pending investigation against the company, while the RD found CAMCL compliant with filing requirements up to FY 2023–24, subject to rectification of minor procedural lapses related to Section 124 of the Act.

The Income Tax Department reported an outstanding demand of ₹9.58 lakh but expressed no objection to the reduction, provided tax recovery was unaffected.

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Considering these submissions, the Tribunal held that the proposed reduction was lawful, proportionate, and commercially prudent.

It also noted that there was full shareholder consensus, no objection from any authority, and no prejudice to creditors or employees.

Approving the petition, the two-member bench comprising Vinay Goel (Judicial Member) and Madhu Sinha(Technical Member) confirmed the capital reduction from ₹1,13,58,450 to ₹25,83,450 by returning ₹87,75,000 to shareholders and directed the company to file the approved minute with the ROC within 30 days.

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