ORA-28366: invalid database encryption operation
Cause : The command for database encryption contained improper spelling or syntax.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Verify the spelling and syntax and execute the command again.
Well, the reason for above error is that i have taken the above script from a 11g database and running it on 10g database. 11g has bring some changes in password management. Below code is executed on 11g and user created successfully, which is expected result.