Microsoft Designer Bluetooth Mouse is not detected in 10.10.3

Microsoft Designer Bluetooth Mouse is not getting detected as a bluetooth mouse on OSX 10.10.3. During pairing, it just shows up as a bluetoth device and after some time, there is a popup that no mouse is connected. Also, when you try to add the mouse though Mouse->Add a Bluetooth Mouse screen, the mouse is not gettng detected.

But the mouse works once its paired, but its not seen as a Mouse by OSX. Its just being detected as a generic bluetooth device.