Hi everybody
I found the answer,thanks to a good link on mpls by Jeff Doyle:
http://www.networkworld.com/community/node/26670
Just putting it here just in case if someone has a similar question
Constraints:
It can be bandwidh( most common), affinity ( aka coloring of the link) etc
If none constraints specified, ingress LSR checks the TE topology and computes the shortest path based on TE cost If constraint such as bandwidth is specified, ingress first finds all the possible path to reach a particular destination, and then picks the one with the lowest TE metric.
In my example, R1 first finds all the possible paths meeting the constraint imposed ( 20 mig) and then selects the one with the least TE cost.
Thanks
Have a great day