Supreme Court upholds Calcutta HC order in Tata Motors’ ₹766-crore Singur compensation case

The Supreme Court of India has dismissed the West Bengal government’s plea challenging observations made by the Calcutta High Court in the Singur compensation dispute involving Tata Motors. The apex court upheld the High Court’s earlier order and clarified that the compensation-related matter concerning the Singur factory project would continue to be heard by the Calcutta High Court. The next hearing in the matter has been scheduled before the bench of Justice Aniruddha Roy on August 12.

The dispute relates to an October 30, 2023 order passed by a three-member arbitral tribunal directing the West Bengal government to pay ₹765.78 crore as compensation to Tata Motors for the Singur Nano factory project that did not materialise. The tribunal had also awarded interest at the rate of 11 per cent annually from September 1, 2016, until full recovery of the compensation amount. Following the ruling, Tata Motors informed the National Stock Exchange that the tribunal had unanimously directed payment of the compensation amount.

The state government subsequently challenged the arbitral tribunal’s decision before the Calcutta High Court. The state alleged that the chairman of the tribunal, retired Justice V. S. Sirpurkar, had close associations with the Tata Group and claimed the proceedings were biased. The government sought cancellation of the arbitral award on those grounds. However, Justice Aniruddha Roy rejected the plea on June 19, observing that there was no legal basis for the allegations raised against the tribunal chairman.

The state later moved the Supreme Court against the High Court order. The matter was heard by a bench comprising Justice P. S. Narasimha and Justice Atul S. Chandurkar. The Supreme Court upheld the observations made by the Calcutta High Court and dismissed the state government’s petition. Separately, the Calcutta High Court has also stayed the arbitral tribunal’s compensation order for eight weeks and directed the state government to submit a bank guarantee during this period.

The Singur dispute dates back to 2006, when the then Left Front government led by Buddhadeb Bhattacharjee announced Tata Motors’ Nano car factory project in Singur in Hooghly district. Around 1,000 acres of land were allotted for the project. After the change in government in West Bengal, the Mamata Banerjee-led administration asked Tata Motors to return the land. Tata Motors agreed to do so but sought compensation for investments and costs incurred during the project, leading to the prolonged legal dispute.