Problem:

Last week I came across this bug (?) with AsyncFileUpload control in updatepanel. The control is not firing OnUploadedComplete server side event when it’s in updatepanel.

Solution:

After doing some research on this issue, came across these solutions.

1)     Add another AsyncFileUpload control on the page and set its’ style to display:none; 

<div style="display: none;">

  <cc1:AsyncFileUpload ID="AsyncFileUpload1" runat="server" />

</div>

2)     Another workaround is to add the following attributes to the <form> tag of the page..

enctype="multipart/form-data" method="post"

Both the solutions are working fine.

Thanks to obout_teo and MikeMelendez of Asp.Net forums