Supreme Court Denies Restoration of Acquired Land to Industrial Unit in Singur; Restricts Benefit of Kedar Nath Yadav Judgment to Vulnerable Farmers

Headnote:

The Supreme Court of India, in State of West Bengal & Ors. v. M/s Santi Ceramics Pvt. Ltd. & Anr., held that industrial entities cannot claim restoration of land acquired for the Singur Project based on the relief granted in Kedar Nath Yadav v. State of West Bengal (AIR 2016 SC 4156). The Court observed that the earlier judgment aimed to protect vulnerable cultivators and poor agricultural workers, not commercial enterprises. The appeal filed by the State of West Bengal was allowed, setting aside the Calcutta High Court’s direction to restore 28 bighas of industrial land to M/s Santi Ceramics Pvt. Ltd. However, the respondent was permitted to remove or auction its remaining structures and plant within a stipulated period.

Background:

1. M/s Santi Ceramics Pvt. Ltd. purchased agricultural land in 2001–02 and converted it to industrial use in 2003 for manufacturing ceramic electrical insulators.
2. In 2006, the State of West Bengal initiated acquisition proceedings under Sections 4 and 6 of the Land Acquisition Act, 1894 for TATA Motors’ “NANO” project in Singur, including the respondent’s land.
3. The respondent filed objections under Section 5-A, which were rejected. Compensation of ₹14.54 crores (₹5.46 crores for land and ₹9.08 crores for structures) was paid and accepted without protest.
4. After Kedar Nath Yadav (2016) quashed the acquisition for violation of procedural safeguards and directed restoration to cultivators, the respondent sought restoration of its industrial land.
5. The Calcutta High Court (Single Bench, 24.04.2017; Division Bench, 11.10.2018) directed restoration of land and structures to the respondent, treating it on par with cultivators. The State challenged this order before the Supreme Court.

Court’s Observations:

1. The Supreme Court clarified that the relief in Kedar Nath Yadav was designed to protect “poor agricultural workers” and other vulnerable sections, not industrial entities.
2. Industrial units with financial capacity and access to legal remedies could not claim parity with farmers who lacked such means.
3. The respondent had accepted full compensation in 2006 without protest and remained inactive for a decade, amounting to acquiescence and estoppel.
4. Judicial relief cannot extend to those who failed to challenge acquisition proceedings in time or sought to benefit from judgments secured by others (free-rider principle).
5. The acquisition attained finality, and restoration after nearly two decades was impractical as the land had been redistributed to cultivators after Kedar Nath Yadav.
6. However, the Court permitted the respondent to remove its structures or have them auctioned, allowing retention of auction proceeds after deducting expenses.

Legal Provisions and Precedents:

1. Land Acquisition Act, 1894 – Sections 4, 5-A, 6, 11 (procedure for acquisition, objections, award, and compensation).
2. Article 136, Constitution of India – Special Leave Petition jurisdiction of the Supreme Court.
3. Kedar Nath Yadav v. State of West Bengal, AIR 2016 SC 4156 – Quashing of Singur land acquisition; relief for cultivators.
4. Abhey Ram v. Union of India, (1997) 5 SCC 421 – Scope of relief in acquisition cases.
5. Delhi Administration v. Gurdip Singh Uban, (2000) 7 SCC 296 – Effect of failure to challenge acquisition.
6. Municipal Corporation of Greater Bombay v. Industrial Development Investment Co. Pvt. Ltd., (1996) 11 SCC 501 – Finality of acquisition after award and possession.

Citation: 2025 INSC 1222

Case: State of West Bengal & Ors. v. M/s Santi Ceramics Pvt. Ltd. & Anr.

Court: Supreme Court of India

Coram: Hon’ble Mr. Justice Surya Kant and Hon’ble Mr. Justice Joymalya Bagchi

Civil Appeal: Arising out of SLP (C) No. 33701 of 2018