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After much probing I found out that it might be occurring due to java.policy setting in the jvm.
I added a line to grant all permissions in java.policy file and restarted domino server and voila, it worked.
So , the original classnotfound exception was due to the fact that there was not enough permission to access that class during runtime.
I should have checked server logs before for detailed error reports. I was using java debug console and it only showed Classnotfound but did not show the whole trace. This is what misguided me from actual problem for almost 2 days. :)
Feedback response number WEBB8PCA6W created by ~Yentl Quettumisonflar on 12/08/2011