Drive is not showing the delete option in disk management, how to dele

What it looks like is that the SYSTEM files needed to start Windows are on the "Local Disk" partition and the BOOT files are on the Win7 partition and you need both in the same place - the active partition - to get this to work (keep the old W7 installation without reinstalling).

You could give this a try:
Leave the Active flag where it is now: Win7
Using the third party program or Diskpart, delete the "Local Disk" partition. (This may or may not be necessary)
Then, using a Windows 7 Repair Disk or installation disk, boot into System Repair Options and run "Startup Repair". You may need to run it 3 times in order to rebuild all the needed system files.
Startup Repair
Startup Repair - Run 3 Separate Times

If you need to get back into your old Windows to make a repair disk you can always switch the Active flags back to where they were. You have this option until you delete the Local Disk partition.

Hi subhranshu50. Sorry, it is a holiday here in the states, and I am on Turkey duty.

I re-read the thread and it occurs to me that with all of the uninstalling and reinstalling - You installed W8 and W7, then uninstalled W8, installed another W7 for a total of 2 W7 installations, that you may have a knot that can't be untangled (read: time for a clean install).

Now we have succeeded in deleting one of the W7 partitions, leaving 1 installation, but the system can not boot to that installation.
And System Repair does not recognize the remaining installation as compatible with the disk.

I assume you are using the same disk to run System Repair that you used to install W7?

Do you have someone who's computer has SP1 on it that you can use to create a Repair CD?

You can also download an ISO to make an Installation Disk with W7-SP1

Once you have a working disk, try the Startup Repair first. If that does not work you can try this option too:
Repair Install