South Asia

India court suspends Tata Motors land return

Farmer outside Nano factory in Singur
Image caption Land acquisition is becoming a major political issue in India

India's Supreme Court has directed the government of West Bengal to suspend the return of land acquired by a car maker to farmers.

Tata Motors had challenged the government over its measures to reclaim the land.

The land in Singur, near Calcutta, was acquired by the state's former communist government in 2006 for Tata Motors to make its low-cost Nano car.

After months of violent protests, the company pulled out of West Bengal.

Tata Motors then went on to set up a new plant in the state of Gujarat.

In May, the regional Trinamul Congress party led by Mamata Banerjee won a landslide victory in West Bengal against the state's long-serving communist government on the promise that she would restore the land to the farmers.

Earlier this month, West Bengal passed a law that would allow for the return of about 400 acres of land to farmers who never accepted government compensation for their land.

Some legislators have criticised the law, saying it was introduced in haste. Others have demanded that the entire 997 acres of land taken for the project should be restored.

Even as Tata Motors contested the decision in the High Court in Calcutta and the Supreme Court, the government began the process of returning the land - which is currently being leased by Tata - to the farmers.

On Tuesday, the Supreme Court directed the government to suspend the return of land until further orders are passed by the High Court in Calcutta, where the dispute is pending.

Tata Motors has reported a tripling of profits in the last year.

However, sales of small cars lagged somewhat over the same time period, perhaps reflecting difficulties with the Nano, which began production in 2008.

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