Judgment Y.R. Meena, J.-Both these appeals are directed against the impugned order of learned Single Judge dated 02.06.2005. Since common issue is involved in both the appeals and common impugned order has been challenged, we heard and disposed of them by this common Judgment . 2. In both these appeals, the appellants prayed that the order of learned Single Judge dated 02.06.2005 be quashed and set aside and further to dismiss both the writ petitions filed by the respondents with costs. 3. The appellant Project Director, Rajasthan Urban infrastructure Development Project (hereinafter, referred as RUIDP) had issued an advertisement/ notification dated 31.05.2003 issued on 06.06.2003 in the daily Hindustan Times inviting application for pre-qualification bids for international competitive bidding for Bisalpur-Jaipur Water Supply Project under the Asian Development Bank loan No. 1647-IND. 4. That pre-qualification document has been cancelled and a fresh pre-qualification document dated 10.05.2004 has been issued. The petitioners submitted the applications to pass through the pre-qualification test to take part in bid. As both the petitioners were not found to fulfil all the requisite qualifications as per pre-qualification document, their applications were rejected. The allegation of the respondents are that decision of rejection of applications is arbitrary, unfair and non-transparent and clear violation of the express terms of the pre-qualification process. After scrutiny of the applications, out of 22 applicants, only 5 applicants were found who fulfilled the pre-qualification conditions and their names are approved for final bid. The applications of these petitioners have not been approved and this has been communicated to the petitioners vide letter dated 09.05.2005 and letter dated 28.03.2005. The petitioner-respondents prayed that these letters be quashed and the process of their pre-qualification for Bisalpur-Jaipur Water Supply Project be cancelled and the applications of the petitioner-respondents be considered afresh in accordance with the norms laid down. 5. The case of the petitioner-respondents that the decision regarding conditions of pre-qualification is arbitrary and mala fide and otherwise also both the petitioners fulfilled all the requisite conditions for pre-qualification to participate in the bid for Bisalpur-Jaipur Water Supply Project. Both the petitioner-respondents had requisite working capital as well as work experience so desired for allotment of the work of Bisalpur-Jaipur Water Supply Project. 6. Both the petitioner-respondents had requisite working capital as well as work experience so desired for allotment of the work of Bisalpur-Jaipur Water Supply Project. 6. The learned Single Judge in the impugned order held that though the respondent-appellants are justified in setting a limit in regard to the working capital of a particular company while allowing it to participate in the bid but the entire process must reflect fairness and transparency avoiding a hyper technical approach which might create an impression that it has set up complicated labyrinth of procedure missing the substance by fixing pre-qualification criteria merely to eliminate eligible applicants which do not suit the interests of the committee. 7. The learned Single Judge further hold that the working capital of the company should be looked in the balance sheet of the company in order to take an overall view of the capability and financial capacity of the company while permitting them to participate in the bid. The learned Single Judge also held that it is not apparent at all whether the same criteria has been adopted by the respondents for the selected applicants although the Counsel for the respondents has insisted that the applicants who have been short listed also have been subjected to the same procedure. 8. The learned Single Judge further was of the view that petitioner-respondents in fact fulfil the pre-qualification criteria fixed by the committee, therefore, it is proper to direct the respondents not to disqualify the petitioner-respondents from participating in the bid on account of their working capital as they are eligible to participate in the bidding process for awarding the contract. Finally the prayer sought for in the petition was allowed holding that letter dated 09.05.2005 communicated to the petitioner-respondents stand quashed and set aside and petitioner-respondents shall be permitted to participate in the pre-qualification bid for awarding the contract. 9. Learned senior Counsel Mr. C.S. Vaidya Nathan for the appellants submits that to complete the Bisalpur-Jaipur Water Supply Project, huge money is required to be invested and to finance this project the main source is Asian Development Bank, therefore, pre-qualification conditions are laid down as required by the Asian Development Bank. 9. Learned senior Counsel Mr. C.S. Vaidya Nathan for the appellants submits that to complete the Bisalpur-Jaipur Water Supply Project, huge money is required to be invested and to finance this project the main source is Asian Development Bank, therefore, pre-qualification conditions are laid down as required by the Asian Development Bank. The basic requirement to participate for pre-qualification is that company or in joint venture, the partners of that company should have working capital of US $ 18.0 million and the working capital will be calculated as per guidelines of Asian Development Bank. Apart from the working capital, the participants should have a specific construction experience i.e. applicant should have work experience in similar size and nature of work. 10. Mr. Vaidya Nathan draw our attention on page 244, wherein calculation of working capital of Gammon India Ltd, has been given if the loan amount payable within a year is excluded, the Gammon Indian has working capital only US $ 9.50 million and at page 243 its partner Crompton Greaves Ltd. has working capital US $ 7.30 million. Thus, the working capital of both companies comes to US $ 16.8 million, therefore, the Gammon India Ltd. does not fulfil the requisite pre-qualification condition for final bid so far working capital is concerned. 11. For working experience, learned senior Counsel Mr. Vaidya Nathan submits and draw out attention at page 93 and 131 wherein some doubts are raised regarding nature of work and substantial completion of work. It was clarified that substantial completion will mean that subject work have been successfully completed and made operational. Then he draws our attention at page 194 and 196. At page 194, copy of the certificate issued for Managing Director in case of contract work regarding supply and laying of clear water transmission main of size 1875 mm dia Mild Steel (MS) pipes for a length of about 94 kms from ongur river to Vandalur road. The perusal of this certificate reveals that the work regarding pipe supply and laying work is completed, but except some ancillary works which are under progress at present. 12. This letter has been issued on 30.09.2004. The perusal of this certificate reveals that the work regarding pipe supply and laying work is completed, but except some ancillary works which are under progress at present. 12. This letter has been issued on 30.09.2004. At page 196 for Managing Director, this certificate has been given regarding contract work given to M/s. Gamman India Ltd., major part of the works was carried out through sub-contractor and in the last column in the certificate, it has been said that work is being commissioned. Mr. Vaidya Nathan submits that in both the cases work has not been completed as it has not come in operational stage. At page 288 (Annexure-R/2) is a certificate issued by the Chief Engineer, Chennai Metropolitan Water Supply and Sewerage Board for supply and laying of clear water transmission main of size 1875 mm dia mild steel (MS) pipes for a length of about 94 kms. from Ongur river to Vandalur. In the certificate, it has been said that contract was awarded to M/s. Gamman India Ltd. and that has been completed to a length of 13.54 kms. 13. Then he draw our attention to reply filed by respondent-appellants. In clause (xv) of para 9, the respondent-appellants replied that substantial completion of work has been clarified and in two cases as the contract work is not in operational stage, therefore, it cannot be said that the contract work has been completed. 14. In clause (xxxix) and clause (x1vii) of para 9 of the reply, the respondent- appellants, stated that in the certificate dated 17.09.2003 the work hardly finished 50% of the work assigned to it and the work referred in certificate dated 30.09.2004 in last column of the certificate, it has been mentioned that the project is yet to be commissioned means work is not completed. 15. In clause (1xviii) of para 9 of the reply, the respondent-appellants stated that required information regarding working capital has not been submitted by the partner of the petitioner Gamman India Ltd., therefore, learned senior Counsel Mr. Vaidya Nathan submits that when Gamman India Ltd. neither have the working capital required nor work experience for pre-qualification for the final bid, therefore, its application was rightly rejected to participate in the bid for award of contract. .16. Mr. Vaidya Nathan submits that when Gamman India Ltd. neither have the working capital required nor work experience for pre-qualification for the final bid, therefore, its application was rightly rejected to participate in the bid for award of contract. .16. Mr. Vaidya Nathan, learned senior Counsel again reiterate that this condition that the applicants should have US $ 18 million working capital and should have work experience of the same nature and size, that is applicable to all the applicants in same way. Now he brought to our notice some facts in case of Subhash Projects and Marketing Limited. He submits that the working capital calculated in case of Subhash Projects and Marketing Limited is given at page 261, 262 & 263. Shri Vaidya Nathan, .learned Senior Counsel further submits that if the loan amount payable within year is excluded then the working capital of Subhash Projects and Marketing Limited comes to US $ 8.05 million and working capital of its partner, which is Simplex Concrete Piles (India) Limited, is US $ 6.00 million. The total working capital of both comes to US $ 14.05 million, which is less than US $ 18.00 million, therefore, not qualified to participate in the bid for allotment of the contract. 17. Shri Vaidya Nathan, learned Senior Counsel also draw our attention at page 244 and 245, a letter of Andhra Bank and a letter of Canara Bank. Shri Vaidya Nathan submits that the Andhra Bank has given the letter of credit in format. In letter, the Andhra Bank has bound itself to provide a sum of Rs. 24,90,00,000.00 to Subhash Projects for Bisalpur-Jaipur Water Supply Project and that guarantee will remain in force till 14.06.2007. But in case of Canara Bank, the letter of credit has not been given in the format. In that letter, the words in format like bind and guarantee has not been said, therefore, that letter of credit cannot be considered for inclusion in the working capital of Subhash Projects. Thus the Subhash Projects with its partners does not have the requisite working capital, therefore, not qualified for bid. 18. He also draw our attention at page 63, wherein it has been clarified as to how the working capital will be calculated. Instructions are given in Section 1. Mr. Thus the Subhash Projects with its partners does not have the requisite working capital, therefore, not qualified for bid. 18. He also draw our attention at page 63, wherein it has been clarified as to how the working capital will be calculated. Instructions are given in Section 1. Mr. Vaidya Nathan draw our attention at instruction 21.2, which provides that if the requisite clarification of the information has not been provided by the applicant to the employer, then the application in that case may be rejected. Mr. Vaidya Nathan, learned Senior Counsel also draw our attention at page 171, 172 and 173 i.e. regarding minutes of the meeting of Tender Approval Committee. After applying the same criteria in case of all the 22 applicants, the Committee found only 5 applicants eligible, who fulfilled all the requisite pre-qualification conditions, to participate in the bid. He also draw our attention at page 303, the pre-qualification processs. In pre-qualification process, it is provided that the employer shall use ADBs standard procurement document for the pre-qualification to take part in bid and to give letter of credit in format is a mandatory requirement, this format has been approved by ADB. He further submits that as letter of credit has not been given by Canara Bank in format, therefore, that letter was not accepted. 19. Mr. Vaidya Nathan further submits that as the Asian Development Bank is the main financier, therefore, the pre-qualification conditions to take part in the bid for contract is in term of the standards laid down by the Asian Development Bank and pre-qualification conditions laid down regarding working capital and work experience are fixed after the approval of the Asian Development Bank, which is the main financier to finance the project in this case. 9.20. He also draw our attention at page 42, wherein it has been said in the preface that the Pre-Qualification Document (PQD) has been prepared by the Rajasthan Urban Infrastructure Development Project (RUIDP) and is based on the Standard Procurement Document for the Pre-Qualification of Bidders (SPQD) issued by the Asian Development Bank dated June 2003. 10.21. Mr. Vaidya Nathan further submits that when the Bisalpur-Jaipur Water Supply Project is mainly financed by the ADB, the Pre-Qualification condition to take part in the final bid is in terms of the Asian Development Bank and respondents-appellants have no choice. 10.21. Mr. Vaidya Nathan further submits that when the Bisalpur-Jaipur Water Supply Project is mainly financed by the ADB, the Pre-Qualification condition to take part in the final bid is in terms of the Asian Development Bank and respondents-appellants have no choice. Even otherwise also the criteria given in the prequalification test is just and reasonable as unless one has the sufficient working capital and experience in the line of work, it is not only risky to award a contract to such party which does not have the sufficient working capital and experience, but in that case some time the Government can be put to heavy loss if the contractor run away before completion of the project work. 122. He further submits that same criteria has been applied in case of all the 22 applicants, therefore, it is not discriminatory nor arbitrary nor mala fide and when it is neither arbitrary nor discriminatory nor mala fide, the Court has its limits for judicial review of the policy decision taken by the Government for completion of the Bisalpur-Jaipur Water Supply Project and Court should not interfere in such matters. He placed reliance on the decision of their Lordships reported in 1979 (3) SCC page 489 para 12 and 2000 (2) SCC 617 para 3. 123. He also draw our attention to pages 270 and 271, wherein the details of 22 participants are given regarding their financial evaluation results and experience evaluation results. Out of 22, only 5 participants fulfilled the requisite condition to participate in the bid for award of the contract. This evaluation has been approved by Asian Development Bank. .24. Mr. Kuhad, learned Counsel for the petitioner-respondent Subhash Projects and Marketing Limited submits that the working capital has been given at page 261 in case of Subhash Projects and at .page 262 in case of Simplex Concrete Piles (India) Limited. He further submits that at page 261-262 while calculating the working capital, the appellants respondents failed to take the working capital as per the balance sheet of the Company. Even otherwise they have wrongly excluded the letter of credit dated 24.09.2003 issued by the Canara Bank in favour of the Subhash Projects and Marketing Limited, whereby the Canara Bank has sanctioned Rs. 226.00 Crores of credit in favour of Subhash Projects and Marketing Limited if the contract of Bisalpur-Jaipur Water Supply Project is awarded to Subhash Projects. 125. Even otherwise they have wrongly excluded the letter of credit dated 24.09.2003 issued by the Canara Bank in favour of the Subhash Projects and Marketing Limited, whereby the Canara Bank has sanctioned Rs. 226.00 Crores of credit in favour of Subhash Projects and Marketing Limited if the contract of Bisalpur-Jaipur Water Supply Project is awarded to Subhash Projects. 125. If that amount is included, then the petitioner-respondent has working capital of more than US $ 18 million. He further submits that the letter of credit issued by the Canara Bank is sufficient as that has been straight away sent to the Project Director of Rajasthan Urban Infrastructure Development Project regarding credit facility to Subhash Projects and Marketing Limited to the extent of Rs. 226.00 Crores for execution of work of the Bisalpur-Jaipur Water Supply Projects. 126. He further submits that while calculating the working capital, the working capital must be current assets minus current liabilities and loan payable within year does not come under the current liabilities. Therefore, loan payable within year should not be excluded for calculating the working capital of the Company. He also supports the order of learned Single Judge that when the decision of the Government is arbitrary and mala fide and to eliminate the petitioner-respondents from the bid, the Court has jurisdiction and this is a case of judicial review, where Court should interfere. 127. Mr. Anil Kumar for respondent Gamman India Ltd. supports the argument of Mr. Kuhad and further submits that the rejection of the application of respondent Gamman India Ltd. is arbitrary and mala fide. As per the accounting system in India, the working capital should be seen as per the audited balance sheet of the company and if that be seen, then the working capital of the Gamman India Ltd. with its partner in joint venture is far exceeding than US $ 18 million. He further submits that working capital has been computed as per international standard system of accounting. That was not the terms and conditions for pre-qualification in the document, therefore. computing the working capital of the respondent along with its partner in the joint venture is arbitrary. 128. When the respondent Gamman India Ltd. along with its partner in joint venture fulfil the requirement of working capital as per balance sheet, he should be permitted to take part in the bid for award of Bisalpur-Jaipur Water Supply Project. computing the working capital of the respondent along with its partner in the joint venture is arbitrary. 128. When the respondent Gamman India Ltd. along with its partner in joint venture fulfil the requirement of working capital as per balance sheet, he should be permitted to take part in the bid for award of Bisalpur-Jaipur Water Supply Project. He further submits that when the application for pre-qualification has been rejected arbitrarily, this Court has power under judicial review and under that power, can set right the mistake committed by the appellants. Learned Single Judge has rightly done it and petitioner-respondent be allowed to take part in the bid for allotment of contract of work of Bisalpur-Jaipur Water Supply Project. 129. The Government of Rajasthan, office of Project Director Rajasthan Urban Infrastructure Development Project has invited the applications for pre-qualification for international competitive bidding Bisalpur-Jaipur Water Supply Project vide communication dated 31.05.2003 published in the Hindustan Times on 06.06.2003. It was cancelled and a fresh document for invitation of the applications regarding scrutiny was issued on 10.05.2004. In the pre-face of the document, it has been said that this pre-qualification document has been prepared by the Rajasthan Urban Infrastructure Development Project and is based on the standard procurement document for the pre-qualification of bidders issued by the Asian Development Bank dated June, 2003. 130. In pursuance of this document, 22 applicants submitted their applications to qualify the pre-qualification scrutiny test. These 22 applications were scrutinised by a committee consisting of senior officers of the Government and finally they found that only five applicants have pre-requisite qualification for bid. They have financial capacity i.e. working capital as required and also have work experience. Therefore, names of five applicants have been approved which can participate in the bid. This result has been approved by the Asian Development Bank. 19.31. Letter to this effect has been issued to the applicants who submitted their applicantions for pre-qualification scrutiny test. This result was also communicated to all the aplicants who submitted their applications for pre-qualification scrutiny. .32. Both the petitioner-respondents after seeing this result, they were not found successful in the pre-qualification scrutiny. They challenged this result on the ground of mala fide and decision of the Government is arbitrary. The preliminary objection of learned senior Counsel for the appellants Mr. .32. Both the petitioner-respondents after seeing this result, they were not found successful in the pre-qualification scrutiny. They challenged this result on the ground of mala fide and decision of the Government is arbitrary. The preliminary objection of learned senior Counsel for the appellants Mr. Vaidya Nathan is that in such contractual matters and policy decisions, the Court should not interfere. On the other hand, the case of the Counsel for petitioner respondents that it is a fit case where the Court should exercise its power of judicial review. .33. First we will deal with the scope of judicial review. 20.34. What is the scope of judicial review in cases of decisions taken by the State Government, this issue has been considered time and again by their Lordships in various cases. some cases are cited for our consideration to see whether the case in hand is the case of judicial review. Before we go into the facts of the case in hand, we would like to refer the observations of their Lordships on this issue in various cases. 21.35. This aspect has been considered by their Lordships in detail in the case of Tata Cellular vs. Union of India, 1994 (6) SCC 651 . Their Lordships have referred the observations of the Apex Court in the case of Erusian Equipment & Chemicals Ltd. vs. State of W.B. that when a Government is trading with the public, the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure. 36. Their Lordships have laid down some principles as to what extent the Court have the jurisdiction to interfere on the principle of judicial review. For ready reference, it reads as under:-"(1) The modern trend points to judicial restraint in administrative action. .(2) TheCourt does not sit as a Court of appeal but merely reviews the manner in which the decision was made. .(3) TheCourt does not have the experience to correct the administrative decision, If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be falliable. .(2) TheCourt does not sit as a Court of appeal but merely reviews the manner in which the decision was made. .(3) TheCourt does not have the experience to correct the administrative decision, If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be falliable. .(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. .(5) TheGovernment must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. .(6) Quashing decisions may impose heavy administrative burden on the administrative and led to increased and unbudgeted expenditure." 37. In para 152 and 153 their Lordships further felt that Court is not expertise in all fields and the power of judicial review is not as one as the Court can observe in appeal. The observations of their Lordships reads as under:- "152. We make it clear that we are not disturbing the other selections since the power of judicial review is not an appeal from the decision. We cannot substitute our decision since we do not have the necessary expertise to review. 153. Lastly, quashing may involve heavy administrative burden and lead to delay, increased and unbudgeted expenditure; more so, in a vital field like telecommunication." 2.38. In the case of G.B. Mahajan & Ors. vs. Jalgaon Municipal Council & Ors., 1991 (3) SCC 91 , in para 46 again their Lordships held that all principles of judicial review apply in the case of contracts, but the Court has inherent limitations and should not interfere unless there is sufficient material placed before the Court and their Lordships observed as under:- "46. vs. Jalgaon Municipal Council & Ors., 1991 (3) SCC 91 , in para 46 again their Lordships held that all principles of judicial review apply in the case of contracts, but the Court has inherent limitations and should not interfere unless there is sufficient material placed before the Court and their Lordships observed as under:- "46. While it is true that principles of judicial review apply to the exercise by a government body of its contractual powers, the inherent limitations on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be shown a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of wh