i would like to know whether its required to control RTS and CTS signals to get the response from Xbee to the microcontroller for the command frame sent.
"whether its required to control RTS and CTS signals to get the response from Xbee"
That is a question about XBee - it has nothing to do with Keil, nor Keil tools, nor the 8051, nor any other microcontroller!
If you want details of the Xbee operation, then you will have to study the Xbee documentaion and other supporting resources available from Xbee.