Component makers to be heard by court

The Calcutta HC on Tuesday allowed component makers of Tata Motors, who were allotted land in Singur, to be heard in litigation between the auto maker and the West Bengal govt

The Calcutta high court on Tuesday allowed component makers of Tata Motors Ltd, who were allotted land in Singur, to be heard in litigation between the auto maker and the West Bengal government.

Tata Motors, India’s biggest truck maker, in 2008 moved its small-car factory to Sanand in Gujarat from Singur following violent local protests. TheTrinamool Congress administration, after coming to power in May, enacted a law to take back the land alloted to Tata Motors and its parts suppliers.

Tata Motors challenged the constitutional validity of the Singur Act, and in a letter to West Bengal Industrial Development Corp. said its component suppliers have collectively spent Rs. 171 crore at Singur, while pegging its own sunk cost on the abandoned factory at Rs. 440 crore.

The Supreme Court on 29 June asked the state government not to distribute land in Singur.

A division bench of the high court, comprised of justices Pinaki Chandra Ghose and Mrinal Kanti Chaudhuri, will continue to hear the case on Wednesday.

The disputed law does not provide for any compensation to be paid to the parts makers. It, however, says Tata Motors will be compensated, but does not specify the method of arriving at a specific amount.

Calcutta high court judge Indra Prasanna Mukerji had on 28 September upheld the constitutional validity of the Singur Act, but stayed his judgement till 2 November to give time to Tata Motors to appeal against it.

Mukerji had pointed out in his order that the state’s proposal to compensate Tata Motors was “vague and uncertain”.

The car maker moved the division bench of the high court late last month with a two-pronged challenge. It appealed against Mukerji’s interpretation of the disputed Singur Act and said it was a victim of “hostile discrimination” for not being able to commission its small-car factory within the envisaged deadline.

Tata Motors has in its appeal cited examples of at least seven-eight companies to whom the state government had allotted land for projects that never took off, but the land was still not taken away, according to Siddhartha Mitra, a counsel for the firm.