Tata Motors To Reclaim ₹766 Crore Investment In Defunct Singur Plant After Arbitral Victory

Tata Motors is poised to recoup an investment of ₹766 crore for its venture in the defunct Singur plant, originally designated for the production of the Tata Nano. This development follows the company's triumph in an arbitral decision on October 30, 2023, signifying the conclusion of proceedings against the West Bengal Industrial Development Corporation Limited (WBIDC), the overseeing body of the West Bengal government's Industry, Commerce, and Enterprises Department.

The Arbitral Tribunal, composed of three members, has unanimously ruled in favour of Tata Motors. The awarded sum encompasses an interest rate of 11 per cent per annum, effective from September 1, 2016, until the actual retrieval from WBIDC. Assuming a simple interest rate of 11 per cent over seven years (September 1, 2016–September 1, 2023), the interest amounts to ₹589.65 crore, resulting in a recoverable amount of ₹1,355.43 crore. It is essential to note that the final payout figure will be higher due to the applicability of interest until the completion of the arbitral award.

Furthermore, Tata Motors has been granted permission to claim ₹1 crore to cover the cost of the legal proceedings.

It is worth mentioning that the automaker ceased Nano production effectively in 2018, with only one Nano assembled at the Sanand facility that year. Presently, the plant is engaged in the production of other hatchbacks like Tiago and Tigor.

The Singur Land Case: A Historical Overview On May 18, 2006, Ratan Tata unveiled the Nano car project in Singur, coinciding with the inauguration of the second term of then West Bengal Chief Minister Buddhadeb Bhattacharjee. However, the project encountered opposition from local farmers protesting against what they perceived as the 'forced' acquisition of land for the Tata project.

Mamata Banerjee, the opposition leader at the time, embarked on an indefinite hunger strike on December 3 of that year in protest against the project. Her strike concluded following appeals from then-President APJ Abdul Kalam and then-Prime Minister Dr. Manmohan Singh.

On March 9, 2007, Tata and the then-left government finalised the Singur land lease deal. By May 24, negotiations between the Left government and the TMC had collapsed. On February 15, 2008, Tata announced plans for the Nano's rollout by October. On September 3, Tata suspended work, and a month later, they declared their decision to relocate Nano operations from West Bengal to Gujarat. In 2011, the TMC, led by Mamata Banerjee, swept the state assembly election. Once in power, Banerjee introduced an ordinance to reclaim the Singur land. On June 22 of that year, Tata Motors challenged the Singur Act in the Calcutta High Court, seeking a stay on the government's order. Following the refusal of the Calcutta High Court to grant a stay, Tata appealed to the Supreme Court.