Tata Motors Ltd said it has won an arbitration award of ₹766 crore from the West Bengal Industrial Development Corp. Ltd (WBIDC), the state’s industrial development agency, marking the resolution of a long-standing dispute related to its Singur plant, which was shut in 2008 due to protests against land acquisition.
Tata Motors had plans to manufacture its Nano model, touted to be the world’s cheapest car, at the facility.
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The arbitral tribunal also ordered WBIDC to pay the interest on the amount at an 11% rate, starting from September 2016 and extending until the actual recovery of the funds. “The pending arbitral proceedings before a three-member arbitral tribunal has now been finally disposed of by a unanimous award in favour of Tata Motors Ltd, whereby the claimant has been held to be entitled to recover from the respondent (WBIDC) a sum of ₹765.78 crore with interest thereon at 11% per annum from September 1, 2016, till actual recovery thereof. The claimant has also been held to be entitled to recover from the respondent a sum of ₹1 crore towards the cost of the proceedings,” said Tata Motors in a statement.
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The Singur issue has been widely seen as a test case for land acquisition and industrial development in India. The roots of the dispute can be traced back to the early 2000s when the West Bengal government, led by the Left Front, announced plans to acquire 1,000 acres of fertile farmland in Singur to build a car factory for Tata Motors. The government argued that the factory would create jobs and boost the local economy.
However, many local farmers and political leaders, including the Trinamool Congress’s Mamata Banerjee, opposed the land acquisition, arguing that the nearly 6,000 families that were displaced were not fairly compensated. In 2011, capitalizing on the protests against land acquisition in Singur and Nandigram, Banerjee ousted the Left alliance, marking the end of the longest-ruling democratically elected Communist party in the world.
Tata Motors’ decision to move out of Singur was announced in Kolkata by Ratan Tata, who had launched the ambitious project to give India its “people’s car” at a ₹1 lakh price tag. However, the company had already made substantial investments and commenced construction of the factory in Singur in 2007 before it had to shut down the project in 2008. Subsequently, Tata Motors relocated its manufacturing unit to Sanand in Gujarat, which continues to be a site for Tata Motors’ other passenger vehicles after the Nano project was shut down in 2018.
