While googling related to this issue, I came across a bug raised in sun
related to this generics type inference
issue.
http://bugs.sun.com/bugdatabase/view_bug.do?bug_id=6302954
So this is found to be fixed in later versions of jdk 1.6.0_20
and hence it was working in jdk 1.6.0_26
Thought its worth sharing.