My last night ruined due to this.
Here is the complete story.
I have installed composer on Rackspace. Then i installed drush with composer(composer requires drush/drush:8.*).
But i was able to run drush only from ~/.composer/vendor/bin/drush/drush. But not from drupal root.
Here was the error i was getting:
I have increased php memory limit from php.ini and in settings.php of drupal as well. But no luck.
At the end following solutions works.