Many Thanks to both joefawcett, shbyland for giving some light for my problem.
I am not writing any raw rtf statements and also I am not using any third party software.I am using word API to convert HTML Stuff to rtf .
I serached for INCLUDEPICTURE in the rtf document .I found
INCLUDEPICTURE \\d "C:\\\\DOCUME~1\\\\prasadb\\\\LOCALS~1\\\\Temp\\\\ sing.bmp"
That means it is searching in default directory .Since there is no image in that location it is not displaying .
Image sing.bmp is located in \images under current directory .
How do I point to this directory instead of default directory.