High court stalls Hero MotoCorp’s capacity addition plans. Know why

Hyderabad High Court has directed Hero MotoCorp not to go ahead with the construction activities on the land allotted it by the Andhra Pradesh government in southern part of the state.

This has stalled the capacity addition plans of the of the world's largest two-wheeler manufacturer.

The order comes after a Tamil Nadu-based Ishwariya Orchards filed petition and claimed the ownership of the land.

The high court order has embarrassed the state government as it had stolen a march over neighbouring states to win a fiercely contested battle to host a factory by the company last June.

Economic Times reported that Hero MotoCorp had proposed to build its sixth facility with 1.8 million units capacity at around 3,000 crore, taking the overall annual capacity of 12 million units.

Ishwariya Orchards filed petition after the AP government announced the allotted land to Hero MotoCorp.

The petitioner has alleged that the government failed to follow the provisions of fair compensation, transparent land acquisition and rehabilitation and resettlement.

A top official of Andhra Pradesh Industrial Infrastructure Corporation told ET that the interim orders of the HC were an embarrassment to the AP government, adding that the court admitted the petition of the government to club various litigations in lower courts pertaining to disputes and dispose them of soon.

"There are thousands of acres of lands available with APIIC with clear titles but Hero MotoCorp insisted on this particular land owing to several locational advantages including proximity to Sri City," the official told the financial daily on the condition of anonymity.

When ET contacted Hero MotoCorp, its spokesperson said, "We look forward to a quick and amicable resolution of the issue in cooperation with all concerned. We would not like to comment further on this as the matter is currently sub-judice."