Tata Motors awarded Rs 766 crore compensation for Singur project losses

In a significant victory for Tata Motors, an arbitral tribunal has awarded the company a compensation of over Rs 766 crore for the losses incurred due to protests by Trinamool Congress (TMC) that stalled its small car project at Singur in West Bengal. The tribunal has asked the West Bengal government to pay Tata Motors the compensation, along with interest, according to a stock exchange filing by the Mumbai-based auto major on Monday.

TMC says it is not the final verdict

Following the development, the TMC, which is now in power in the state, said it is not the final verdict and legal avenues are still open before the Mamata Banerjee government. The CPIM, which lost to TMC in 2011 to a large extent because of the Trinamool agitation against Singur, however, wondered whether the Mamata Banerjee-led government had the wherewithal to pay the award.

Tata Motors to recover Rs 766 crore with interest

The auto major stated that the arbitral tribunal has asked the West Bengal Industrial Development Corp (WBIDC) to pay the company Rs 766 crore compensation, in connection with losses incurred on its manufacturing site in Singur. Tata Motors had to shift its plant to produce small car Nano from Singur in West Bengal to Sanand in Gujarat in October 2008 due to a land row. Tatas, by then, had already put over Rs 1,000 crore in Singur.

Arbitral proceedings come to an end

In the regulatory filing, the auto major said a three-member Arbitral Tribunal has ruled that the company is entitled to recover from the respondent WBIDC a sum of Rs 765.78 crore with interest thereon 11 per cent per annum from September 1, 2016, till the actual recovery thereof. The compensation is regarding the auto majors' claim of compensation from WBIDC under various heads, including the loss of capital investments with regard to the automobile manufacturing facility at Singur.

Tata Motors also entitled to recover cost of proceedings

Tata Motors has also been held entitled to recover from the respondent WBIDC a sum of Rs 1 crore towards the cost of the proceedings. With the making of the final arbitral award as mentioned above, the Arbitral proceedings have come to an end.

Ratan Tata's dream of making a Rs 1 lakh car

Ratan Tata's dream of making a car costing only Rs 1 lakh had to face many challenges -- both technical and political -- ever since it was conceived in 2003. Amid opposition from the Trinamool Congress against the plant, Tatas shifted the manufacturing base of Nano from Singur to Sanand in October 2008. While pulling the project out of West Bengal, Ratan Tata blamed the agitation for the group's decision.

Agitation fuelled Mamata Banerjee's rise to power

The agitation, however, fuelled Mamata Banerjee's rise to power in the state as she routed the Left Front government of 34 years in 2011. The then CPIM-led Left Front government had acquired around 1,000 acres of farmland for the project, which was taken back from the Tatas following a court order after Banerjee became the chief minister. Her government partly returned the land to its owners.

TMC says legal avenues still open

In 2022, Banerjee claimed that it was not her but the CPIM which drove away Tata Motors from Singur. "This is not the final verdict or a verdict by the Supreme Court. This is a ruling by an arbitral tribunal. It doesn't mean this is the end of the road for the state government. Legal avenues are still open for the state government," senior TMC MP Sougata Roy said.

CPIM says state paying for TMC's arrogance

CPIM state secretary Md Salim claimed that the state is paying for the "arrogance and destructive politics" of the TMC. Claiming that the state government is already in a debt trap, CPIM Rajya Sabha MP and senior advocate Bikash Ranjan Bhattacharya said, "Now it has no resources to satisfy the award."

BJP says industry driven away from state

BJP spokesperson Samik Bhattacharya said the party was against forcible land acquisition. "But when the industry started, we wanted the factory to come up. For the wrong policies of the CPIM and the militant agitation of the TMC, the Tatas were forced out of the state, permanently driving industries away," he said.

The Singur episode remains a contentious issue in West Bengal politics, with the TMC and the CPIM trading charges over who was responsible for driving away Tata Motors. The arbitral tribunal's award in favor of Tata Motors is likely to further strain the relationship between the two parties.