Ok, This did it for me. Connected Xperia E to my laptop. Enabled USB Debugging. Went to the Computer > Right Click > Manage > Device Manager > Other Devices > Android ADB Interface > Right Click > Update Driver > Browse my computer for Driver Software > Let me pick from a list of device drivers on my computer .Now, here is the MAIN part. Instead of looking for Android ADB Interface, scroll down & you will find a driver named Sony so0101 . Click next & install it. Now, Eclipse detects my device !!
NOTE : USB DEBUGGING must be enabled ,otherwise the device (XPERIA E) will show under portable devices and no Android ADB Interface will be present to update.
Hope, it helps someone as it took me two days to figure it out ! Cheers !