Hey Aravind,
It appears that if a student isn't currently enrolled in the course, grades for that student might not at all be visible through the Web UI. Can you confirm -- do you in fact still have a way to see the student's grades through the Web UI after the student is unenrolled from the course? The API's general intentions is to let you do what the Web UI does, but not more -- if the Web UI doesn't let you see grades of unenrolled students, you shouldn't expect the API to let you either.
If you do want this functionality, and it's not available through the Web UI or the API, then that would be an enhancement request, likely, and fulfilling it would probably require it to be put in both places, not just one.
--
Viktor