The decision to debar the petitioner lacked due process as it failed to provide notice and an opportunity for hearing, rendering the action arbitrary and against the principles of natural justice.

JUDGMENT

1. The petitioner, JBM Electric Vehicles Private Limited has petitioned this Court impugning the letter dated 25 April and 29 April 2022 issued by the Ministry of Heavy Industries [MHI] and IFCI Limited. The communication essentially debars the petitioner and its group companies from all future tenders and for the period of the Production Linked Incentive Scheme [PLI Scheme] upto 31 March 2027. The aforesaid action is stated to have been taken upon it being found that the petitioner had furnished incorrect information for the purposes of claiming benefits under the PLI Scheme. The second letter impugned in the writ petition is a communication from IFCI holding that the petitioner had submitted an application for extension of benefits under the PLI Scheme basing its Global Group Revenue to be Rs.10,590.74 crores. IFCI contends that on scrutiny it has been found that the aforesaid declaration is incorrect since it also includes revenue of Rs.910.50 crores from intra-group sales. IFCI goes on to hold that the inclusion of that revenue enabled the petitioner to project that it met the eligibility criteria. This action according to the respondents clearly amounted to a violation of the Integrity Pact Undertaking submitted by the petitioner and consequently warranted its debarment from all tenders of MHI that may be issued during the pendency of the PLI Scheme and up to 31 March 2027. This communication also refers to the letter of the MHI dated 25 April 2022 referred to above. In order to appreciate the challenge which is raised in the writ petition it would be apposite to notice the following essential facts.

2. On 23 September 2021 the Union Government announced the PLI Scheme for the automobile and auto component industry. The PLI Scheme proposed financial incentives to boost domestic manufacturing of advanced automotive technology products and to attract investment in the automotive manufacturing value chain. The Basic Eligibility Criteria was specified as being companies or group companies with an existing presence in India or globally in the automotive vehicle and components manufacturing business having a Global Group Revenue of a minimum of Rs.10,000 crores. Clause 3.2 which set out the eligibility criteria for applicants is reproduced hereinbelow:

"3.2 Eligibility: The applicant company or its Group company(ies) will need to meet the following common criteria to qualify and receive benefits under the Scheme:

Basic Eligibility Criteria:

(a) For company or its Group company(ies) with existing presence in India or globally in the Automotive vehicle and components manufacturing business: