Anil Ambani-led Reliance Energy (REL) won a legal victory today when the Supreme Court allowed it to bid for the Rs 2,600 crore Mumbai sea link project along with Mukesh Ambani-led Sea King Infrastructure.REL can present financial bids up to December 15.Quashing the Bombay High Court order which went against REL, the Supreme Court stated that "the decision to exclude REL is arbitrary, whimsical and unreasonable."The project, linking Mumbai with Navi Mumbai over a 23 km bridge with six lanes, was caught in litigation between the two brothers. There were also two other bidders.REL's partner in the consortium, Hyundai Engineering & Construction Company of Korea, suffered some losses for one year due to the war in Iraq. Therefore, it could not meet the financial requirement of Rs 200 crore net cash profit set by the Maharashtra State Road Development Corporation in the second stage of the global tender norms.The bench, headed by Justice Arijit Pasayat, discussed the accounting methods and observed that the cash flow reporting concept was to find out the ability of the Korean firm to generate cash flow in future. Since this important method of cash flow reporting was kept out without any reason, the decision to exclude the REL consortium was illegal. The court further stated that "for non-consideration of the reconciliation method under the cash flow reporting system, the decision-making process stood vitiated."REL had stated during the hearing before the Supreme Court that it alone was capable of meeting the net worth for the entire consortium.The litigation has delayed the project by at least three years. Originally, the last date for receiving applications was October 20, 2004. Now the whole process has to start all over again.
