SIVARAMAN NAIR, J.

( 1 ) IN this writ petition, the competence of the Tirupathi Urban Development Authority, to insist upon intending sellers of Lands which form part of "development area" within the meaning of A. P. (Urban Area) Development act, 1975, to ensure compliance with the conditions of layout and also to levy external development charges in respect of that area, is questioned. Sri Ramachandra Reddi, learned counsel appearing for the petitioner submits that except development chares not exceeding rupees forty thousand per, hectare as prescribed under Section 28 of the Act, the Tirupathi Urban development Authority, has no power to levy or collect any other charges and that laying of roads, laying of electrical lines as also laying of lines for purpose of sewage and other amenities shall be provided only by the Tirupathi urban Development Authority, from out of the development charges collected. Sri Gopal Rao, learned Standing Counsel appearing for the Tirupathi, urban Development Authority, however, submits that the development charges prescribed under Sec. 28 are of the nature of, tax and that the Tirupathi urban Development Authority, is certainly empowered to insist upon either cash deposits of sufficient amounts or Bank Guarantees therefor from the intending sellers to ensure compliance with all the conditions of layout relating to laying of roads, laving of electrical lines, laying of pipes for supply of drinking water and laying of pipes for purpose of sewage, besides laying of roads, etc. , As the questions raised in the writ petition are of frequent occurrence and general importance the same in my opinion shall be decided by a Division bench of this court. Place the papers before the Hon ble Chief Justice for posting the case before a Division Bench at an early date.

( 2 ) PETITIONER is an Association of owners of lands to and around Tirupathi town. The Association was registered on 7-10-1986 with the object of promoting co-operation among real estate owners, to foster mutual interest and to avoid unfair competition among them. They intend to develop the areas within the local limits of Tirupathi Urban Development Authority, comprising of Tirupathi Municipality and the 89 villages situated in different Gram Panchayaths around the Municipality.

( 3 ) TIRUPATHI Urban Development Authority was created by notification in g. O. Ms. No. 1178 Municipal Administration and Urban Development department, dt. 6-11-1981. That was issued under Section 2 (o) of the A. P. Urban Areas (Development) Act, 1975, hereinafter called the Urban development Act . The 2nd respondent is the Vice-Chairman-cum-Managing director of the Tirupathi Urban Development Authority (hereinafter referred to as the Development Authority ). Petitioner association filed a representation on 6-8-1986 before the 2nd respondent requesting that members of the association may not be required to pay Security Deposits for completing black-top roads or plantation of avenue trees and construction of cement drains or for the approval of lay-outs etc. , since the intending purchasers of plots in the layouts normally belong to middle class and poor families who would not be able to pay the enhanced cost of land, consequent on such demands. In the alternative, they offered that they would lay gravel roads and provide normal drains, in the letter dt. 11-8-1986, the 2nd respondent informed them that it would not be possible to accept the above proposals since the same was against the rules. Petitioner objects to the conferment of power on the 2nd respondent to levy development charges on the owners of the land falling within the local area of the Development Authority - in that it fetters the right of owners to dispose of their lands as house sites after making use of them for other development activities. Petitioner submits that the maximum rate of development charges prescribed under Section 28 (2) of the Act is only Rs. 40,000/- per hectare, whereas the 2nd respon

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