i figured it out.ImageMagick gem was not installed on my linode server and i used dragonfly for images that's why error was coming i just installed it and bingooooo every thing is now working perfectly...........So guys be aware if you are facing the seme problem double check all the required gems installed.
Secondly, if you have installed ruby 1.9.3p360 remember it has bugs due to that request rendering does not complete. So the solution is down the ruby version from p360 to let say p327 and if you are using passenger as a web server then reinstall it. Copy 3 lines that passenger gives after installation in you apache2.cong file. restart server and this error should not occur again. thanks.