India's Supreme Court has sided with automaker Tata and blocked a decision by the government of West Bengal state to return land that the company purchased for a new factory to farmers.

The court Wednesday ordered the state government to await directions from its local high court in the state capital, Kolkata, before handing back 400 hectares of land to local farmers.

West Bengal's state legislature passed a law earlier this month allowing it to reclaim land in the town of Singur that was allotted for a factory to make what has been touted as the world's cheapest car — the Nano.

The factory, which Tata says was nearly complete at a cost of almost $400 million, was abandoned in 2008 after violent protests by farmers who said they were not properly compensated. The automaker then shifted production to the western state of Gujarat.

The Kolkata high court has refused to stay the law ordering the distribution of land to its previous owners.

West Bengal's chief minister, Mamata Banerjee, who took office last month, helped lead the demonstrations against the Nano plant three years ago.