The Supreme Court dismissed a special leave petition (SLP) filed by Hindustan Motors Ltd (HM) challenging the Bengal government’s decision to take back 395 acres at Uttarpara from the auto maker, freeing up a valuable asset for development of industry going forward.
A bench of Justice B.V. Nagarathna and Justice K.V. Viswanathan dismissed the SLP after hearing the matter for over an hour, landing the Mamata Banerjee government a major legal victory at the apex court.
The SC decision, which upheld a judgment passed in favour of the Bengal government in May, lifted the cloud of uncertainty over the ownership and possession of the valuable piece of industrial land less than 20 kilometres from Calcutta, confirming the state’s statutory powers to reclaim land granted for specific purposes when it is not utilised according to the terms of the grant.
The apex court judgment affirmed the validity of the state government’s resumption order of the land which was given under lease to HM, maker of the now defunct Ambassador car, in multiple tranches, starting from 1946.
It marked the culmination of a prolonged legal battle, during which the state demonstrated that the land had remained unutilised for several decades and that its resumption was in public interest and in accordance with law.
Earlier, the land tribunal had upheld the state’s decision to resume the land under the West Bengal Estates Acquisition Act, 1953.
This decision was challenged by HM before the Calcutta High Court, which by a judgment on May 22, 2025, rejected the appeal and confirmed the state’s right to resume the unused land.
An HM official declined to comment on the development.
Chronology
After struggling to compete with the likes of Maruti Suzuki, Tata Motors and Hyundai post liberalisation, the financially crippled auto maker transferred 314 acres to the Shriram group in 2007 after convincing the then Left Front government that it would use the proceeds for revival of the sick unit.
However, in 2011 the company informed the state that it has used up the entire money towards repayment of lenders, meeting outstanding wages, salaries, working capital requirements and statutory dues, leaving a small amount for the revival of the plant.
In 2014, HM announced a suspension of work at Uttarpara, which has continued.
In 2019, the Mamata Banerjee government asked HM to spell out its plans for utilisation of the land. In July 2022, the government expressed its desire to take the land back and develop an industrial zone on the idle land.
In August, HM informed the state that it plans to set up an electric vehicle unit at Uttarpara. On November 9, 2022, the state resumed the 395 acres of land by an order which started the legal battle.
State’s power affirmed
The apex court order and the HC judgment may have a far-reaching implication for Bengal, which is looking for suitable land parcels which also appeal to industry.
The SC upheld the HC’s affirmation of the constitutional validity of an explanation to the proviso to Section 6(3) of the West Bengal Estates Acquisition Act, 1953, which formed the basis of the state’s resumption proceedings, Debanjan Mandal, managing partner of Fox & Mandal, which represented the State at the SC, said.
“…we hold that explanation II to section 6(3) of the Act of 1953 is not ultra vires the Constitution of India,” the bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi of HC had said on May 22. The apex court found no reason to interfere with the findings of the HC and declined to entertain the legal challenge brought by HM, Mandal informed.
The explanation II of the section 6(3) said if the lessee fails or ceases to use the whole or any part of the land for which it was granted the lease, such surplus land can be resumed by the state.
Titagarh Rail
With the HC judgment affirming the right to resumption, the state government allotted 40 acres of land on a 99-year lease for ₹126.63 crore on July 12 to wagons and passenger rail car maker Titagarh Rail Systems, which operates its plant spread over 34 acres adjacent to the HM plot.
TRSL has been looking for additional land to expand its operations amid its growing order book in the passenger rail car segment, including metro coaches and Vande Bharat coaches.
“The strategic nature of this land parcel provides crucial space for providing extra infrastructure and dedicated areas for forming, testing and commissioning of metro coaches and Vande Bharat trains,” the company said.