Supreme Court: Industrial Units Not Entitled to Land Restoration Under Singur Acquisition Judgment

The appeal arose from the Calcutta High Court judgment, which directed the State of West Bengal to restore 28 bighas of land, including structures, to M/s Santi Ceramics Pvt. Ltd. The land had been acquired in 2006 as part of the Singur Project for Tata Motors’ Nano plant. The High Court held that, following Kedar Nath Yadav v. State of West Bengal (2016), all landowners were entitled to restoration.

The State contended that Kedar Nath Yadav applied only to poor farmers whose livelihood depended on agriculture, not to corporate entities. It argued that Santi Ceramics had accepted Rs. 14.54 crore compensation and did not challenge the acquisition until 2016, ten years after the award. The respondent argued that “landowners/cultivators” in Kedar Nath Yadav should include all affected owners, including industrial units, as procedural flaws in acquisition vitiated the entire process.

Main Issue: Whether an industrial enterprise that accepted compensation without objection can claim restoration of land under Kedar Nath Yadav on parity with cultivators.

SC’s Ruling: The Supreme Court held that the relief in Kedar Nath Yadav was intended for “vulnerable and poor agricultural workers,” not commercial enterprises with financial capacity and institutional access. The Court emphasised that Kedar Nath’s directions stemmed from systemic violations affecting marginalised cultivators who lacked the means to litigate. Santi Ceramics, being a manufacturing company with a large industrial unit, fell outside this protective ambit.

The Court further observed that acquisition orders quashed in personam benefit only participating litigants unless the entire process is declared void in rem. Since Santi Ceramics did not challenge the acquisition earlier, accept compensation, and delay action by a decade, its claim was barred by limitation.

The appeal was allowed, and the High Court orders were set aside. However, the company was permitted to Remove remaining structures and machinery within three months; or request auction of such assets, with the net proceeds to be paid to it. No recovery of excess compensation was ordered. The State was directed to re-demarcate the land and complete all actions within four months.

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