in my jquery_roundcorner.js i have replaced the above code with the following code. Actually in velocity file also $ is used, there may be conflicts. so lastly i tried this, its working now.
var jq=$.noConflict();
jq(document).ready(function(){
alert('hello alert1 ');
jq('#navigation li').corner("round 6px");
jq('#navigation a').corner("round 6px");
alert('hello alert3 ');
});