New Delhi: Tata Motors has won a major legal battle against the West Bengal government over the compensation for its abandoned Singur plant, where it had planned to produce the Nano car. A three-member arbitral tribunal on Monday ruled unanimously in favor of Tata Motors and ordered the West Bengal Industrial Development Corporation (WBIDC) to pay Rs 766 crore plus interest at 11% per annum and Rs 1 crore as cost of the proceedings to the company.
The Singur plant case dates back to 2006, when the then Left Front government in West Bengal acquired about 1,000 acres of land from around 13,000 farmers to allot to Tata Motors for setting up a factory for the Nano car, which was touted as the world’s cheapest car. However, the project faced stiff opposition from the Trinamool Congress, led by Mamata Banerjee, who was then the leader of the opposition. Banerjee launched a massive agitation against the land acquisition, alleging that it was done forcibly and without adequate compensation.
The protests forced Tata Motors to pull out of Singur in 2008 and shift its Nano project to Sanand in Gujarat. The company claimed that it had invested Rs 1,800 crore in the Singur plant and sought compensation from the WBIDC for its losses. The WBIDC refused to pay any compensation and instead demanded that Tata Motors return the land.
In 2011, Banerjee came to power in West Bengal and enacted a law to return the Singur land to its original owners. Tata Motors challenged the law in the Calcutta High Court, which upheld it in 2012. Tata Motors then moved the Supreme Court, which set aside the High Court order in 2016 and held that the land acquisition was not for a public purpose and violated the rights of the farmers. The Supreme Court directed the West Bengal government to return the land to the farmers within 12 weeks.
However, the issue of compensation remained unresolved and Tata Motors initiated arbitration proceedings against the WBIDC in 2017. The arbitration tribunal, comprising former Supreme Court judges Justice Vikramjit Sen, Justice B.N. Srikrishna, and Justice A.K. Patnaik, heard both sides and delivered its award on Monday in favor of Tata Motors.
The award is a significant victory for Tata Motors, which had stopped producing the Nano car in 2019 due to poor sales and rising costs. The company said that it will take appropriate steps to recover its dues from the WBIDC as per the award. The WBIDC has not yet commented on the award or whether it will challenge it in court.