Can someone explain why optical rotation occurs? Optical rotation occurs when carbon atom is surrounded by different groups. But how does that affect the direction of light? And why does it happen only for plane polarised light?
My thought - if carbon atom is surrounded by different groups the there is a partial +ve or -ve charge on the carbon atom due to difference in electronegativity between the groups and carbon atom (net dipole moment) which creates an electric field. The resultant vector of the electric field and the field of the electromagnetic wave causes change in direction of light. But even if only 2 groups are different optical rotation should occur. 
Can some one explain what really happens?
 A: "Optical rotation occurs when carbon atom is surrounded by different groups. " This is not entirely correct. The condition is that the molecules are incongruent with their own mirror images, this is called chirality, or equivalently they are not inversion invariant, with respect to inversion of space: $\vec{r}\to -\vec{r}$. 
Examples for chirality include molecules with carbon atoms with four different substituents. 
Now polarized light itself is not invariant with respect to inversion, i.e. you can have two different types of photons that are otherwise (by energy, phase) indistinguishable, say a (+) and a (-) one. Now the interaction of (+) with a chiral molecule M$^+$ is different as the interaction of (-) with the same chiral molecule M$^+$, like for example your right hand interacts differently with a left glove than with a right glove, even if the gloves are otherwise completely identical. This means there is a (usually only slighly) different refraction index $n$ for the two cases. For that the (+) polarized light is more strogly (or weakly) refracted at M$^+$ than the (-) counterpart, which results in the "optical rotation" of the polarization direction.
There is also an quantum mechanical quantitative scattering theory of optical rotation that allows the computational prediction of $n$.   
