Hello Anjali,
have you configured Mail Services Lite? I am just a newbie at this but I believe that is the service that handles mail.
You can configure it by going to the acs-admin page. If your server is bound to the localhost, it is here:
http://localhost/acs-admin/
Find:
Mail Services Lite
...and click on:
Parameters
It is on the far right.
I believe the setting you are looking for is:
SendmailBin
Hope that helps!
-al
