Tata Motors' counsel, Mr Samaraditya Pal, on Friday, told the Calcutta High Court that the State had entered into an indemnity and compensation clause with the auto major by virtue of which the lessor (West Bengal Industrial Development Corporation) was bound to compensate the lessee (Tata Motors).
Mr Pal during his arguments made it clear that he was distinguishing between the “State” and the “Government”.
“The State has entered into valid agreements and it is bound to honour them,” Mr Pal said, while arguing on the petition filed by the auto major challenging the Constitutional validity of the Singur Land Rehabilitation and Development Act, 2011.
According to the counsel, the indemnity clause makes it mandatory for the lessor to compensate the lessee (Tatas) in case the later is unable to set up the small car plant at Singur in West Bengal. Indemnity clause covers capital expenditure, relocation loss and overall loss of the company.
“The lessor agrees to indemnify the lessee as per any losses incurred,” Mr Pal said referring to the agreements signed between Tatas and the State. It was further argued that the first “attack” on the factory site began “through a PIL” (public interest litigation) in March 2007, however, the “State” had “all through defended the acquisition of land”.