Can anybody tell how to produce volumetric lights in engine. giving an effect of as if light coming from sun and filterd from treas appear to us . volumes of light scatterd and concentrated at diffrent places

the engine doesnt currently have them but you can fake them pretty good with sprites

MageFace gave a good example of using sprites with a particle generator in this thread. There's an explanation and example code about 3 pages into the thread.

You could use Sprites for fake volumetric lights

here I have a picture of my game:
http://sc.groups.msn.com/tn/A4/41/3DGSusers/2/2ae.jpg