rakeshrao21 ,
Sorry you are seeing this issue. I replicated it on 2014 and also on 2013 SR2 and 2013 SR1. I could not create a Web Project via Subclipse checkout with any of the three releases. This makes me wonder if it is related to the Subclipse release. Were you using subclipse 1.8 on MyEclipse 2013? Also, what is the version of your subversion server?
However, I’ve raised a bug report, as it only seems to be a problem with a MyEclipse Web Project. Please try to, instead, create a Dynamic Web Project (which can be found under the Web group of projects, in the wizard). The MyEclipse Web Project is, essentially, a Dynamic Web Project, so this should work.
Alternatively, check the project out as a Web Project (make sure you use the name of the project as known in subversion), as you have tried. Then right click on the project and go to Team->Share Project. Follow the wizard as though you are going to share it in the SVN repository. At some point the wizard will inform you that there is already a project in SVN of that name and continuing will checkout the project from SVN. This will have the desired result.
Please let us know if either of the workarounds works for you.