Ok that was stupid !!!
The problem is that com.google.gwt.dev.javac.JdtCompiler.getCompilerOptions 
(JdtCompiler.java:208) 
is Referring to CompilerOptions which as fate would have it is referencing to 
the implementation in selenium-server.jar instead of gwt specific 
implementation.
This jar of course is not needed and can be safely removed(Its there since I 
was working on the Selenium framework).
So once this dependency is removed it works fine .

If you have a similar problem try figuring out which jar "CompilerOptions" is 
referring to thats where the problem might be .



Cheers :)
Abhijit


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