Tata Motors has been awarded a significant sum of ₹765.78 crore with an 11% interest rate from September 2016 by a three-member Arbitral Tribunal, closing a long-standing dispute with the West Bengal Industrial Development Corporation (WBIDC) over the closure of its Nano factory in Singur, West Bengal. Additionally, the company is entitled to receive ₹1 crore for the cost of the proceedings.
The conflict dates back to 2008 when Tata Motors faced opposition, led by Mamata Banerjee and her Trinamool Congress, resulting in the abandonment of the Nano factory in Singur and its relocation to Gujarat. Despite the Trinamool government’s offer of alternative land, Tata Motors opted for a compensation of ₹154 crore, the same amount it had paid the Left Front government for land acquisition.
In 2016, the Supreme Court deemed the Left Front government’s land acquisition in Singur as “grossly perverse and illegal” due to non-compliance with the Land Acquisition Act. Tata Motors argued that the government could not alter its stance during the ongoing legal battle due to a change in the ruling political party.
The Court, however, clarified that the government could change its position if there was evidence of illegal acquisition. Consequently, Tata Motors pursued arbitration under its lease agreement with the state government, which included a provision for dispute resolution. Initially, the Left Front had acquired agricultural land in Singur for the Nano factory, presenting the project as a key step toward industrializing the state and revitalizing its struggling economy.
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