Hi,
As per the suggestion il use the recommended settings for running MBIST and for my application i shall later change the PLL settings as i have done my peripheral settings based on that. hope its possible to do like that.
Yes. After offline BIST the reset is executed (due to ECC errors in memories - BIST do not work with ECC and thus syndromes in memories will not match correct ECC) so all configuration made to PLL are lost. The device will start with default clock. (IRC or XOSC)
You have to configure the PLL in your application.
On seeing the example now i have a fair idea how to execute online tests. but regarding offline test im not sure how to do DCF record and load the same and how to execute the offline tests for MBIST.
This is why you should follow example Lauterbach scripts attached to AN5288 for offline BIST.
Im using PE Micro and s32 design studio. does the calculation procedure vary?
PE uses S-record for this purpose. So you have to create S-record file and load it with PE to micro.
To make it simpler we have created DCF calculators which also provides s-record format for PE:

Calculators are here:
MPC5777C DCF Configurator
and how can i run offline tests is it only through scripts.? or it can be run like online tests in code after startup?
Once you program Offline tests configuration in TEST memory via DCf records, the tests will be started when SSCM machine read last DCF record which contain start bit for STCU offline test.

I know that the self-test configuration is not simple when you see it first time.
This is why we publish AN5288.
regards,
Peter