Kolkata/Singur: The West Bengal assembly on Tuesday passed the Singur Land Rehabilitation and Development Bill, 2011, that will allow it to return land to farmers from the 647-acre plot allotted to Tata Motors Ltd for building its small car factory.

The draft Bill, circulated among the state’s lawmakers on Monday, said that though the state government will seize the entire 997-acre plot, cancelling all allotment orders issued by the previous government, land will be returned only from the 290 acres allotted to Tata Motors’ component suppliers.

Company handout photograph of Tata Motors

“The amendment was required to create more flexibility in distributing land," said Moloy Ghatak, the state’s law minister. “Our intention, however, hasn’t changed: we don’t want to touch the developed plot currently under possession of Tata Motors."

The state government stands by its words, and the Tata Group is welcome to use its abandoned factory in any way it wants, he said.

The state government will now seek governor M.K. Narayanan’s assent to the Bill. It isn’t immediately clear if there is any need to seek the President’s assent as well, but the Trinamool Congress-led state government is hoping that it will not be required.

“We debated this for over 5 hours yesterday," said Partha Chatterjee, West Bengal’s commerce and industries minister, who moved the Bill, referring to the conversation he and other state ministers had with Narayanan on Monday.

Tata Motors issued a strongly worded statement, saying it was forced to leave Singur because of escalating violence. It revealed for the first time that its sunk cost on the abandoned Singur factory was 440 crore and that of its component suppliers was 171 crore.

The state government said in the Bill that it will compensate Tata Motors for its sunk cost, but the component suppliers are not to be paid anything except the premium they paid at the time of land allotment.

“The company had invested nearly 1,800 crore in establishing the plant," Tata Motors said in its statement.

It had installed equipment as well, but moved them to its new factory in Sanand in Gujarat, when in October 2008 it decided to abandon the project at Singur. “The company still has buildings, sheds and infrastructure on the plot on which it has invested about 440 crore," it said.

If the Nano car plant had materialized, it would have employed at least 2,000 people and created 10,000 more direct jobs among the component makers and other service providers, Tata Motors said.

“The Bill does not state the reasons for stoppage of operations," the company said in its statement, adding that it had “reluctantly" abandoned the project because of escalating violence, damage to property, and intimidation of its people. “Tata Motors did not find the situation congenial to continue its operations."

The firm didn’t, however, say what it intends to do next. “Tata Motors will study the Bill and take appropriate steps."

Left parties protested against the Bill in the assembly, saying that while they weren’t opposing its purpose, the Bill wouldn’t stand the test of law. They walked out of the legislative assembly before the Bill was passed.

Leader of the opposition and Communist Party of India (Marxist) legislator Surya Kanta Mishra said the Bill falls foul of India’s Constitution for various reasons, most notably for distinguishing between willing and unwilling owners.

The Bill defines unwilling owners as those who did not accept compensation for land seized from them on protest, and only such people will receive land reclaimed from Tata Motors and its component makers.

According to the government’s records, and annexure to the Bill, about 2,800 people have refused to receive compensation.

Their collective ownership is around 296 acres. More than 10,800 people had received compensation.

Mishra said the state government should have amended the Land Acquisition Act, 1894, under which land was acquired, and returned land to everyone. A new law is “not equitable", he said.

Around 4,000 people who had accepted compensation for their land are preparing to move the Calcutta high court, said Udayan Das, who is spearheading a movement to salvage the Nano car project in Singur.

The project having been abandoned, these people want their land back, he said.

A windfall is awaiting those who are to receive land because real estate prices in Singur have rocketed.

Asked how the state government will address the collective grievance of the people who will not get their land back, Becharam Manna—a Trinamool Congress leader from Singur who led the agitation against Tata Motors’ factory—said: “Most, if not all, of these people are absentee landlords who do not live in Singur and are not dependent on income from their land in Singur."