Tata Motors Ordered to Return Factory Land to Farmers

  • Proper procedure was not followed in land acquisition
  • Tata had retained the land even after relocating plant

Cattle graze on fields next to the boundary wall of the Tata Nano plant in Singur, India, on Aug. 27, 2008.

Photographer: Prashanth Vishwanathan/Bloomberg

India’s top court has ordered Tata Motors Ltd., the owner of Jaguar Land Rover, to return to farmers land leased for a factory to manufacture the Nano, at the time the world’s cheapest car.

Farmers should receive their land back within 12 weeks, a two-judge bench said in its verdict on Wednesday, overturning a lower court order. Proper procedure wasn’t followed in the acquisition process, the judges ruled.

The decision risks stymieing Prime Minister Narendra Modi’s efforts to boost growth and create jobs. While his government backed off on a federal land law after opposition in parliament, it was pinning hopes on state governments to implement measures to make it easier to acquire land.

The case related to the state government’s acquisition of the land before it was leased to the company, Tata Motors said in an e-mailed statement. The company said it will study the judgment in detail before commenting further.

Tata Motors had abandoned the near-complete facility in Singur in October 2008 after violent protests by farmers against the land acquisition. A new government in the state of West Bengal tried to seize the land in 2011 but was pushed back by the Calcutta High Court, which ruled that the administration’s attempt was inconsistent with federal laws.

The company lost 14 billion rupees ($209 million) when it moved the factory to the western state of Gujarat, according to an estimate in 2011.

— With assistance by Subramaniam Sharma, and Unni Krishnan

    Before it's here, it's on the Bloomberg Terminal.