Can anyone confirm if we can create managed packages in Scratch org. Of so, can please share the relevant documentation.
Managed packages are not a tool for code modularization and abstraction within a single production org. Managed packages are intended for ISVs to deliver their products to Salesforce customers, and come with an extensive list of benefits (including IP protection) and restrictions.
It is unclear exactly what you're being asked to do here. It may be as little as complying with enterprise design patterns that utilize separation of concerns and a layered architecture. Or, it may be that your organization plans to utilize the Package Development Model with Unlocked Packages, which you do build in a source-focused, scratch org-based development model.
You should work with your technical lead or architect to understand exactly what code architecture is being prescribed.