Hello folks!
After doing some digging on the internet, I found these articles to be useful:

http://forums.oracle.com/forums/thre...60226&tstart=0
(scroll down to the bottom of thread)

and,

http://www.mcse.ms/archive26-2006-2-2174494.html

The number of processes indeed go upto 150 during the day as I found out.
So, I increased the number of processes in init.ora from 50 to 200.This solution works fine ... atleast for now.

PS:

Do you know about the EMNO process? When Oracle spawns it, it shuts down the database and everyone is caught unawares and face listener errors.

Taken from Alert Log:
Starting background process EMN0
EMN0 started with pid=110, OS id=13601
Wed Jul 12 14:54:12 2006
Shutting down instance: further logons disabled
Wed Jul 12 14:54:12 2006
Stopping background process QMNC
Wed Jul 12 14:54:12 2006
Stopping background process CJQ0
Wed Jul 12 14:54:14 2006
Stopping background process MMNL
Wed Jul 12 14:54:14 2006
Stopping background process MMON
Wed Jul 12 14:54:14 2006
Shutting down instance (immediate)
License high water mark = 133
Wed Jul 12 14:54:14 2006


Does the high water mark got to do anything with it?
Thanks.