ORA-39042: invalid transform name string
Cause : An invalid transform name was specified on a DBMS_DATAPUMP.METADATA_TRANSFORM API call.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Correct the transform name parameter and reissue the API request.
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.