S. B. SINHA, C. J.

( 1 ) THE question, which arises for consideration in this application, is as to whether the Parliament has the legislative competence to enact the Interest on Delayed payments to Small Scale and Ancillary industrial Undertakings Act, 1993 (hereinafter referred to as "1993 Act") in terms of Entry 97 to List I of the vii Schedule to the Constitution of India. FACTS:

( 2 ) THE fact of the matter may, however, be noticed from W. P. No. 10179 of 2001. The andhra Pradesh TRANSCO (hereinafter referred to as "the writ petitioner") has in these applications prayed to declare the 1993 Act as unconstitutional and invalid.

( 3 ) BY reason of the provisions of the electricity Reform Act, 1998, the State electricity Board was bifurcated into A. P. Power General (sic. Generation) corporation Limited (for short GENCO) and A. P. Transmission Corporation Limited (for short TRANSCO ). GENCO was to look after the task of generation of electricity, whereas Transco was obligated to see the transmission of electricity to consumers within the State of Andhra Pradesh. A. P. Transfer Scheme Rules were framed under g. O. Ms. No. 9 dated 29-1-1999 contemplating setting up of distribution undertakings for different areas and transfer of assets and agreements from TRANSCO to the undertakings was provided for therein. By virtue of the said transfer, transco ceased in law to be liable for any default relating to several purchase orders entered into between the petitioner and the state Electricity Board.

( 4 ) THE first respondent entered into several contracts with the State Electricity board for supply of A. C. S. R. conductor. Levy of penalty was provided for in the contract for delayed supply of goods but there was no provision in the contract for any payment of interest for delayed payment.

( 5 ) BASING on the claim preferred by the first respondent before the second respondent, a notice was issued to the writ petitioner for submission of its defence. The writ petitioner contended that the 1993 Act is unconstitutional and, thus, issuance of notice was illegal in so far as the Parliament has no legislative competence to enact the same. SUBMISSIONS:

( 6 ) THE learned Advocate General appearing in support of the writ petitions submits that having regard to the fact that the legislative field is covered by Entries 24, 26 and 27 of List II of the VII Schedule to the constitution; the Parliament is denuded of its power to make any law in this regard. The learned Advocate General would contend that each entry has to be liberally construed and in a case of this nature the doctrine of pith and substance should be applied.

( 7 ) THE Advocate General would further urge that as no declaration was made in relation to the small scale or ancillary industries as is mandatorily required before exercise to make any law is undertaken by the Parliament under Entry 52 of List I and entry 33 of List III of the VII Schedule of the constitution, the legislative field must be held be exclusively occupied by the State. In any event, the provisions of Sections 4, 5 and 6 are- wholly arbitrary and discriminatory and thus violative of Art. 14 as thereby persons similarly situated are sought to be treated differently. Reliance in this connection has been placed on Ishwari khetan Sugar Mills v. State of U. P. .

( 8 ) MR. C. V. Ramulu, the learned standing Counsel for the Central government, on the other hand, would submit that the matter relating to payment of interest is not covered by any entry made either in List I, II or III and thus the parliament has the exclusive jurisdiction in relation thereto in terms of Entry 97 of list I. Strong reliance in this connection has been placed in Naga People s Movement of human Rights v. Union of India.

( 9 ) THE learned counsel would urge that in a situation of this nature and particularly having regard to the fact that several statutes have been enacted by the parliament as regards grant of interest, the parliament cannot be

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