In an unprecedented move, the West Bengal government on Thursday issued an ordinance for taking back the entire land allocated to Tata Motors and its vendors at Singur.

The ordinance was signed by Governor M K Narayanan on Thursday, said Chief Minister Mamata Banerjee.

"The disputed 400 acres will be returned to the farmers while Tata Motors is welcome to set up its project on the remaining 600 acres," she said.

Banerjee's party, the Trinamool Congress, has been alleging that 400 acres was acquired forcibly.

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A Tata Motors spokesperson said: "We are not aware of such a development and we do not want to make any comment unless we have studied the ordinance."

"I have no idea.

"There has been no communication from their side. I feel sorry for the farmers because the land they will get back cannot be tilled," said Sona Koyo Steering Systems chairman and managing director, Surinder Kapur. Sona Koya is one of the 54 vendors.

When Banerjee started the agitation against the Nano factory in 2006, she had demanded the return of 400 acres, most of which was in the vendor park spread over 290 acres.

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The agitation, which resurrected her political career, led to the pullout of the project from Singur in October 2008.

At that time, the mother plant was about 80 per cent complete.

Tata Motors, however, continued to pay the lease rent, though Banerjee today cited non-performance on the company's part.

But the state government was willing to compensate Tata Motors if it decided not to set up a project on the other 600 acres, which would be set aside for public purposes, she said.

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"In the event Tata Motors decides not to set up any project, arbitrators will decide the appropriate compensation," she said.

Tata Motors had indicated to the previous government that it would give up the land if it was compensated with around Rs 550 crore (Rs 5.5 billion).

Sources close to the development said a legal battle between the two could not be ruled out.

"We will definitely seek compensation," Kapur said.

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Asked if he would explore legal options, he said, "We will have to go through the ordinance." A legal expert said an ordinance could always be challenged.

"The government probably believes that the earlier acquisition by the Left Front government does not have legal sanction.

The government, through the ordinance, wants to ensure that the land belongs to it so that it can give 400 acres back to the unwilling farmers," said Dipankar Dasgupta, former professor of economics at Indian Statistical Institute.

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The earlier Left government had said the disputed land was much less than 400 acres.

"Those who lost 244 acres did not take cheques. Of this, many had disputes over ownership and some did not have titles. So, who will get back the 400 acres?" asked a Communist Party of India (Marxist) leader.

Leader of Opposition and Communist Party of India-Marxist leader, Surya Kanta Misra, said the move was unconstitutional as the House was in session.

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"The House is adjourned but that doesn't mean it is not in session," Misra said.

The move, being seen as unilateral, has taken both India Inc and the political parties by surprise.

Top leaders of the Congress, a partner of the Trinamool Congress in the state government, said they were clueless about the decision.

A few hours before the announcement, state Congress leaders camping in New Delhi were questioning how Banerjee would fulfill her electoral promise.

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While Karnataka does not have an example of government allotting land for industries and then taking it back, there are some instances where the state has taken back close to 500 acres during the past three years.

"Some companies who got land for projects were sitting on it for 8-10 years.

"We have taken back such land," said Murugesh R Nirani, minister for large & medium industries, Karnataka government.