Hi svk1234,
Thanks for posting in Microsoft answers!
Check if Microsoft Software Shadow Copy Provider service is disabled.
This behavior is by design. Disabling System Restore will limits the ongoing usefulness of System Restore on the computer.
To re-enable, please try:
- Open gpedit.msc from Start Search box.
- Navigate to the following branch.
Computer Configuration\Administrative Template\System\System Restore.
- In the right pane, please configure the “Turn off system restore” policy. Please set it to Not Configured.
See the following link for similar issue : http://social.technet.microsoft.com/Forums/en/w7itprosecurity/thread/0f2eebbe-6cdf-4ecc-93af-9249b7339ec9
Hope this helped
Azeez Nadeem - Microsoft Support