Hello Glenn,
It worked!  Here is what I did based on your suggestions (yes, I am
using ruby enterprise edition):

1.  I uninstalled the whenever gem and reinstalled it.  It moved
whenever executable from /usr/local/bin to /opt/ruby-enterprise/bin/
whenever
2.  I gave full path to whenever in my Capistrano recipe as shown
below:

  desc "Update the crontab file"
  task :update_crontab, :roles => :db, :only => { :primary => true }
do
    run "cd #{current_path} && /opt/ruby-enterprise/bin/whenever --
update-crontab #{application}"
  end

>From thereon, it executed flawlessly.  One thing that I fail to
understand though.  I am running as the same user on local as well as
production server (bruparel) and bruparel has the following PATH env
variable set on the production server:

ssrxgrp ~/r_work/ssfilemgr/current: which whenever
/opt/ruby-enterprise/bin/whenever
ssrxgrp ~/r_work/ssfilemgr/current: echo $PATH
/opt/ruby-enterprise/bin:/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/
bin:/sbin:/bin:/usr/games

As you can see above, I have it first in the PATH, why then Capistrano
fails to find it?

Thanks and regards,

Bharat

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