ORA-32735: DIAG process is not running in the instance
Cause : DIAG process is not alive
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Check error in DIAG trace file and issue the command again when DIAG is restarted
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.