Thanks all for your help.
We got the connection working by including a dynamic port in the URL, but this solution is not a reliable connection.
Also I have checked for the TCP IP settings they are enabled and no firewall is active on the SQL server.
I think if I am able to make connection from other MII servers leaves no doubt with the the SQL server configuration.
We have to employ instance name in the the server URL as mention in my query and cant rely upon dynamic ports.
I think there could be the problem with the Java environment on which MII Prod is setup, kindly drop some suggestions and constraints on using sqljdbc4.jar on the host MII server.
Regards,
Swapnil B