I had already tried checking the version but i could not find it. It was always checking this import first 
However, i made a change to requirements.txt
rasa==2.8.15
transformers==2.11.0
rasa[transformers]
and my code ran. Seems like the issue would have been rasa version. Since, on local i had python 3.6.6 so it was picking rasa version 2.8.15 and similar supported transformers but on azure function server it was python 3.7 so was loading latest rasa version and latest transformers.
But now i have another issue and I really need some help on this. The command
interpreter = Interpreter.load(model_directory1)
is taking too much time to load model (it builds model from scratch , downloading bert model vocab and other configurations). It happens every time azure function is called. It takes nearly 2 minutes. Is there a way by which I can save this interpreter object and just consume it in a Azure Function.