Hello Anirudh Kumar,
Sorry for late reply to this,
Could you mind request with your web hosting provider to help you increase the
memory_limit to 256MB and
max_execution_time to 120 and see if that could help?
If the memory_limit and max_execution_time increased also doesn't help much here, Is it possible attach the image which can't be upload in the media manager at here?
So we can try to investigate on this issues, because i have tested to upload, it work fine for me. see my screenshot :
http://screencast.com/t/QgXKLJ6sM