Tata Motors Wins Compensation From West Bengal In Singur-Nano Project Case
Arbitration panel rules in favour of the company to recover Rs 766 crore with interest from the state.
Tata Motors Ltd. said an arbitration panel has ruled in its favour to recover Rs 766 crore with interest from the West Bengal Industrial Development Corp. for the Singur-Nano project that the company was forced to scrap.
A three-member arbitral tribunal unanimously held that Tata Motors is entitled to recover Rs 765.8 crore, along with interest at 11% per annum from Sept. 1, 2016 till actual recovery thereof from WBIDC, the carmaker said in an exchange filing on Monday. The company is allowed to recover Rs 1 crore towards the cost of the proceedings.
The company had claimed compensation from WBIDC on account of the loss of capital investments made to set up an automobile manufacturing facility at Singur.
Following the award, the arbitral proceedings have come to an end, the statement said.
In October 2008, the company had moved the Nano project from Singur in West Bengal to Sanand, Gujarat, following protests at the site against land acquisition.
Years-Long Legal Battle
The Left Front government in West Bengal had announced in 2006 that Tata would set up a car manufacturing unit to roll out its affordable range 'Nano' model, for which close to 1,000 acres of land would be allocated. Tata Motors began construction of the plant in Singur the following year.
West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee, then in opposition, led the protest against land acquisition by announcing an indefinite hunger strike.
After months of unrest and political uproar, the Tata Group company announced its exit from the state. The issue then turned into a years-long legal fight between the company and the state government.
The company had challenged a 2011 law through which the state government took possession of the land. In June 2012, the Calcutta High Court declared the Singur Act unconstitutional and restored the company’s rights under the land lease agreement.
Despite this, Tata Motors did not receive possession of the land. The state government filed an appeal before the Supreme Court in August 2012.
In August 2016, the Supreme Court declared the acquisition of the land for the Nano project by the West Bengal government as illegal and directed that the land be returned to the landowners.
The lease agreement contained a clause that if the acquisition was deemed illegal, the state would indemnify the company for the capital cost it had incurred on the site.
The agreement also provided for arbitration as a mechanism to resolve any dispute between the parties.
Tata Motors then sought arbitration and filed its claim.
