Thank you Eric. Sorry for getting back so late.
There are no other limits set - however I found the solution as follows:
Recently I had a problem with mail taking too long to show me emails - so another web search advised that I switch of the "iCloud Documents" settings to have mail not use iCloud.
When I turned this setting back on - thereby giving mail permission to use iCloud - the mail drop feature started working again.
Would have been easier if there was documentation on this through the help in Mail. Hope this information helps others.
Really appreciate your participation and effort.
Regards
Manesh