Hi,
This ahppens when we enable iCloud first time.
Resolution
What you need
1. A PC (assuming you have contacts backed up in Windows 7. Usually contacts will be in location C:\Users\<username>\Contacts
<username>: is user windows 7 login ID
2. iPhone connected to PC
3. iTunes
Go to iPhone, settings -> iCould -> Contacts. Turn off contacts
Connect your iPhone to PC, run iTunes, Select Library (on right hand side corner, Click on iPhone, Select Info button (after Summary button). You can see Sync Contacts, select Windows. click on Sync button (bottom right corner). Bingo you can have your contacts back to your phone.
Once you get your contacts back, enable Contacts in iCloud (settings -> iCould -> Contacts)
The above procedure works for those who have contacts in Windows PC,