Tata Motors Limited and Ors. Vs.

State of West Bengal and Ors.

MANU/WB/0777/2011
 Political Background

• 2006:
- WB government invites TATA to set up “Nano Car” Project in Singur,
Hooghly; Proposed land 1000 acres
- TATA announces the project; Mamata goes on hunger strike for 26 days
- Construction of factory begins; mob of women attack the site; farmer’s suicide
• 2008:
- Panchayat elections in Singur, Mamata won with unexpected gain, again
protest against factory & violence
- Ratan Tata after lot of threats to government to leave; finally moves out the
project to Sanand, Gujarat
• 2011:
- Mamata is chief minister now.
- brings the law to acquire land given to TATA
 In Courts

• 2011:
- TATA challenges the 2011 act in Calcutta HC; it refuses to intervene
- TATA goes to the Supreme Court; it directs HC to settle the dispute
- Justice I.P. Mukherjee starts hearing in Cal. HC while the other
judge recused himself; decision in favour of the state
- TATA challenged this verdict in division bench of HC; it says2011 act is
unconstitutional
- State challenge division bench verdict in SC

• 2016:
- SC: Due process of law was not followed by state in acquiring the land
in 2006; hence TATA should return the land within 12 weeks. (“anyway
you’ve moved out of Singur, why not return the land then”)
 Details of the Case

• Acquisition by state:
- 997 acres acquired & 645 acres leased to TATA
- State had to pay INR 136 Cr towards compensation & INR 76 Cr towards
drainage
• Problem started after the execution of the lease:
- letter from police “employees should take written permission from the police
before going out into the villages adjacent” + 20 police camps nearby+ locals
harassing the employees
• Govt letter to TATA asking whether they want to do something else on the
land?
• 2011: An act to acquire land from TATAs
- Singur Land Rehabilitation and Development Act, 2011
- Singur Land Rehabilitation and Development Rules, 2011
These two acts are impugned in the case
 Was the power of eminent domain exercised by the
state?
Argument for TATA Motors
• Use of Entry 18/List II to acquire
the land is wrong
• History of land acquisition and
Constitution
• Article 31 acquisition was exercise
of eminent domain power. Article
300A the deprivation of person of
his property would only be for
public purpose (Hindustan
Petroleum Corpn. Ltd. v. Darius
Shapur Chenai)
• Only way to acquire land for state is
Entry 42/List III
Argument for State
• Under the Entry 18/List II state
has exercised the power of land
reform and not eminent domain
• This is extinguishment of land
lease tenure and not acquisition of
the land
• Purpose of the lease not fulfilled
on TATAs behalf
• The rent paid by them was very
less
• State had to bear loss of Crores
 Was the power of eminent domain exercised by the
state?
Argument for TATA Motors
• By entry 42, acquisition is the
function of power of eminent
domain
• Under this power land can only
be acquired for public purpose
• No public purpose was disclosed
in the 2011 act
• Repugnancy and compensation
Argument for State
• TATAs are tenant of government,
can be asked to restore possession
on notice (WB Tenancy
Regulation Act, 1976)
• Need of the section of people i.e.,
unwilling owners would be
termed as “public purpose”
• 2011 Act is to extinguish the lease
u/Entry 18 and not to acquire the
land per say because this property
already belonged to the state
 COURT’S ANALYSIS

• K.T. Plantation v. State of Karnataka, the Court maintained that Article

300A recognised the principles of eminent domain to a substantial extent.
Acquisition could be made for public purpose and upon payment of
compensation which was not illusory

• What is the nature of the impugned Act? Is it reclamation of land and

rehabilitation as argued by the Learned Counsel for the State.

• State of Bihar v. Kameshwar Singh reported in MANU/SC/0020/1952: it is

also possible for the state to acquire only the leasehold interest without
acquiring the reversion.(See paragraph 218)

• So the sum of these principles is that a state may own a property and lease it
out to a private person or a body corporate. To acquire the property free
from the lease it has to acquire the lease hold interest.
 COURT’S ANALYSIS

• The Supreme Court has consistently opined that when there is acquisition
there is exercise of power under entry 42 of List III of the Constitution.
Now this power cannot be an incident of any other power. (Rustam
Cavasjee Cooper v. Union of India, MANU/SC/0011/1970)

• 90 year old leasehold interest in the TATAs Extinguishment of a monthly

tenancy which is of negligible value cannot be equated with
extinguishment of such a long lease.

• Hence this is the exercise of the power of eminent domain hence it has to
satisfy the twin tests of being for public purpose and providing
compensation to the deprived
 COURT’S ANALYSIS

• PUBLIC PURPOSE:
- Long title of the act: 2 purposes – to return the land to unwilling owners
who had not accepted the compensation & To utilize the balance portion of the
land “in public interest” and “for the benefit of the state”
- Section 6: land will be used for socio-economic purpose like employment
generation
• Is the public purpose mentioned vague?
- In 2006 land was acquired for the same i.e., to generate employment and
leading to socio-economic development
- Statement of objects of the act: since money is wasted and no
employment has been generated also, many people protested against it
 COURT’S ANALYSIS

• What is public purpose under 1884 act?

- The public purpose mentioned in the 1884 act (Section 3.f ) may be
suggestive of public purpose but the categories of public purpose can
never be closed

• Well settled principle that court should not do inquiry into the
legislature’s perception of public purpose.

• The court can only decide if no public purpose is disclosed in the

legislation. It cannot make enquiry regarding the correctness of statements
in the act or the willingness of the government to fulfill that purpose
 CONCLUSION

• The Singur Land Rehabilitation and Development Act, 2011 is held to be

constitutional and valid.

• The above Act was not wholly an exercise of the power of the state
legislature under entry 18 of list II of the seventh schedule to the
Constitution of India, but, was also an exercise of its power under entry 42
of list III. Hence, there was acquisition of land leased out to the Tatas and
not the extinguishment of lease.

• Sufficient public purpose has been made out in the act hence the validity of
the act is upheld.