Court rules in favour of Tata Motors in Singur land tussle

A view of a factory shade of a new small car project, run by Tata Motors, is seen in Singur 50 km (32 miles) north of Kolkata August 7, 2008.

KOLKATA (Reuters) - The Calcutta High Court on Friday nullified a law that forced Tata Motors (TAMO.NS) to forfeit Singur land acquired by the company to build a factory, in a decision that could pave the way for the automaker to recoup some of its $310 million investment in the development.

The law, which forced the company to hand back land in West Bengal, was ruled "unconstitutional and void" by the Calcutta High Court, lawyers present told Reuters.

The ruling will be challenged in the Supreme Court, said Kalyan Banerjee, a lawmaker in the state government.

Tata, which abandoned the project in 2008 and shifted the factory to make its ultra-low cost Nano car to Gujarat, has previously sought compensation over the dispute.

"We will be studying the order before deciding the next course of action," Tata Motors spokeswoman Ashmita Pillay said.

Shares in Tata Motors were flat in the afternoon, after having risen slightly following the ruling. (Reporting by Sujoy Dhar in KOLKATA and Henry Foy in MUMBAI; Editing by Tony Munroe)