I was able to modify the 'Network Connection' preferences in eclipse and 
resolve the problem. 

The URL used to deploy the application to Google App Engine was thro' ssl 
(https). In the corporate network I work, both http & https are mapped to 
the same port in the proxy server. So after changing the https port to 80, 
I got it working.

PS: Posting this message so someone can get benefited.

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