Hi Vaithiyanathan,
My only guess as to why 'C' was chosen is that the question mentions 'a huge volume of traffic'. Its generally perceived that stateful session beans don't scale that well so they may not be the best choice when the number of users is very large.
Servlets can be a reasonable choice if the session information is mainly needed by the web and not the business tier.
I would still be inclined to choose 'D' myself, but the word 'huge' is kind of trying to drag you toward the servlet answer I think