Centre likely to drag defaulters of FAME scheme to Delhi High Court

The Centre is planning to take legal action against electric vehicle (EV) manufacturers who have not refunded incentives claimed wrongfully under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME II) scheme. Three original equipment manufacturers (OEMs) are yet to refund around Rs 310 crore to the government due to violations of phased manufacturing programme (PMP) guidelines.
 

According to government officials, the Ministry of Heavy Industries is preparing to move Delhi High Court (HC) against Hero Electric and Benling India.
 

The matter involving Okinawa Autotech, another defaulter, is already sub-judice. It filed a petition in the HC in November 2023, seeking a restraining order against the government’s directive to recover the subsidy.
 

“All defaulters were given sufficient time to return the wrongfully claimed subsidy. Of the seven, four have repaid it, but three are yet to do so. Okinawa’s case is already in court. We will proceed with legal action against the remaining two,” a senior government official said.
 

Penalties amounting to approximately Rs 140 crore were imposed on Hero Electric, while Okinawa faced a penalty of Rs 120 crore. Benling received a penalty of Rs 50 crore. The penalty amounts continue to increase due to accrued interest.
 

Hero Electric, in an emailed response to the paper, said, “We have been actively engaged in discussions regarding this matter for over 18 months now. Our stance is publicly available, and we remain committed to resolving this issue. We have proposed various solutions for an amicable settlement already. On the matter of non-compliance, we have already provided the Ministry of Heavy Industries with necessary information demonstrating our complete compliance with the FAME policy and that the order in question does not apply to us at all.”
 

Similar queries sent to Benling India remain unanswered until the time of going to press.
 

In addition to taking legal action in court, the ministry is also “debarring” these OEMs from participating in any other government schemes administered by the ministry.
 

“The companies are being barred from participating in both existing and future schemes administered by the ministry,” another official said.
 

Hero Electric, Okinawa Autotech, Greaves Electric Mobility (formerly Ampere EV), Benling India, Revolt Intellicorp, AMO Mobility Solutions, and Lohia Auto were the seven OEMs found violating the PMP guidelines and were instructed to repay approximately Rs 469 crore in May 2023.
 

The Ministry of Heavy Industries initiated the process to ‘deregister’ the violators from the FAME portal. Notices were sent to these companies by the ministry, instructing them to comply and repay the subsidy. However, when the OEMs requested more time to present their case, the ministry granted an extension until July 2023. Starting in August, the defaulter OEMs began complying with the ministry’s order.
 

Revolt Intellicorp became the first firm to repay Rs 50 crore to the government. In October, Greaves Electric Mobility — the e-mobility division of Greaves Cotton — refunded Rs 124 crore. Subsequently, AMO Mobility Solutions and Lohia Auto also settled their accounts soon after.
 

In November, Okinawa became the first OEM to seek legal remedy against the Ministry of Heavy Industries’ directive to repay the subsidy. During the court hearing, the Centre argued that Okinawa should not be granted interim relief as it has ‘acknowledged’ violation of the scheme. The case is ongoing, with the next hearing scheduled for May 16.