Neha,
Can you please try below steps
1) Uninstalled all existing Jre versions
2) Installed Jre 1.6.0_25 (make sure you install jre for 32 bit machine. workbench support 32 bit only)
3) Added below 2 lines at C:\XXXX\jre6\lib\security\java.policy
permission com.sun.deploy.security.SecureCookiePermission "XXXXXX.com:portnumber-", "listen,accept,connect,resolve";
permission java.lang.RuntimePermission "accessClassInPackage.sun.security.action";
Thanks
Shaji