diff --git a/server/src/com/cloud/deploy/FirstFitPlanner.java b/server/src/com/cloud/deploy/FirstFitPlanner.java
index 88478595d75..ead384e53b7 100644
--- a/server/src/com/cloud/deploy/FirstFitPlanner.java
+++ b/server/src/com/cloud/deploy/FirstFitPlanner.java
@@ -106,7 +106,7 @@ public class FirstFitPlanner extends PlannerBase implements DeploymentPlanner {
     @Override
     public DeployDestination plan(VirtualMachineProfile<? extends VirtualMachine> vmProfile,
             DeploymentPlan plan, ExcludeList avoid)
-                    throws InsufficientServerCapacityException {
+    throws InsufficientServerCapacityException {
         String _allocationAlgorithm = _configDao.getValue(Config.VmAllocationAlgorithm.key());
         VirtualMachine vm = vmProfile.getVirtualMachine();
         ServiceOffering offering = vmProfile.getServiceOffering();
@@ -179,38 +179,35 @@ public class FirstFitPlanner extends PlannerBase implements DeploymentPlanner {
                 s_logger.debug("The last host of this VM cannot be found");
             }else{
                 if (host.getStatus() == Status.Up && host.getHostAllocationState() == Host.HostAllocationState.Enabled) {
-                    //check zone/pod/cluster are enabled
-                    if(isEnabledForAllocation(host.getDataCenterId(), host.getPodId(), host.getClusterId())){
-                        if(_capacityMgr.checkIfHostHasCapacity(host.getId(), cpu_requested, ram_requested, true, cpuOverprovisioningFactor)){
-                            s_logger.debug("The last host of this VM is UP and has enough capacity");
-                            s_logger.debug("Now checking for suitable pools under zone: "+host.getDataCenterId() +", pod: "+ host.getPodId()+", cluster: "+ host.getClusterId());
-                            //search for storage under the zone, pod, cluster of the last host.
-                            DataCenterDeployment lastPlan = new DataCenterDeployment(host.getDataCenterId(), host.getPodId(), host.getClusterId(), host.getId(), plan.getPoolId());
-                            Pair<Map<Volume, List<StoragePool>>, List<Volume>> result = findSuitablePoolsForVolumes(vmProfile, lastPlan, avoid, RETURN_UPTO_ALL);
-                            Map<Volume, List<StoragePool>> suitableVolumeStoragePools = result.first();
-                            List<Volume> readyAndReusedVolumes = result.second();
-                            //choose the potential pool for this VM for this host
-                            if(!suitableVolumeStoragePools.isEmpty()){
-                                List<Host> suitableHosts = new ArrayList<Host>();
-                                suitableHosts.add(host);
+                    if(_capacityMgr.checkIfHostHasCapacity(host.getId(), cpu_requested, ram_requested, true, cpuOverprovisioningFactor)){
+                        s_logger.debug("The last host of this VM is UP and has enough capacity");
+                        s_logger.debug("Now checking for suitable pools under zone: "+host.getDataCenterId() +", pod: "+ host.getPodId()+", cluster: "+ host.getClusterId());
+                        //search for storage under the zone, pod, cluster of the last host.
+                        DataCenterDeployment lastPlan = new DataCenterDeployment(host.getDataCenterId(), host.getPodId(), host.getClusterId(), host.getId(), plan.getPoolId());
+                        Pair<Map<Volume, List<StoragePool>>, List<Volume>> result = findSuitablePoolsForVolumes(vmProfile, lastPlan, avoid, RETURN_UPTO_ALL);
+                        Map<Volume, List<StoragePool>> suitableVolumeStoragePools = result.first();
+                        List<Volume> readyAndReusedVolumes = result.second();
+                        //choose the potential pool for this VM for this host
+                        if(!suitableVolumeStoragePools.isEmpty()){
+                            List<Host> suitableHosts = new ArrayList<Host>();
+                            suitableHosts.add(host);
 
-                                Pair<Host, Map<Volume, StoragePool>> potentialResources = findPotentialDeploymentResources(suitableHosts, suitableVolumeStoragePools);
-                                if(potentialResources != null){
-                                    Pod pod = _podDao.findById(host.getPodId());
-                                    Cluster cluster = _clusterDao.findById(host.getClusterId());
-                                    Map<Volume, StoragePool> storageVolMap = potentialResources.second();
-                                    // remove the reused vol<->pool from destination, since we don't have to prepare this volume.
-                                    for(Volume vol : readyAndReusedVolumes){
-                                        storageVolMap.remove(vol);
-                                    }
-                                    DeployDestination dest =  new DeployDestination(dc, pod, cluster, host, storageVolMap);
-                                    s_logger.debug("Returning Deployment Destination: "+ dest);
-                                    return dest;
+                            Pair<Host, Map<Volume, StoragePool>> potentialResources = findPotentialDeploymentResources(suitableHosts, suitableVolumeStoragePools);
+                            if(potentialResources != null){
+                                Pod pod = _podDao.findById(host.getPodId());
+                                Cluster cluster = _clusterDao.findById(host.getClusterId());
+                                Map<Volume, StoragePool> storageVolMap = potentialResources.second();
+                                // remove the reused vol<->pool from destination, since we don't have to prepare this volume.
+                                for(Volume vol : readyAndReusedVolumes){
+                                    storageVolMap.remove(vol);
                                 }
+                                DeployDestination dest =  new DeployDestination(dc, pod, cluster, host, storageVolMap);
+                                s_logger.debug("Returning Deployment Destination: "+ dest);
+                                return dest;
                             }
-                        }else{
-                            s_logger.debug("The last host of this VM does not have enough capacity");
                         }
+                    }else{
+                        s_logger.debug("The last host of this VM does not have enough capacity");
                     }
                 }else{
                     s_logger.debug("The last host of this VM is not UP or is not enabled, host status is: "+host.getStatus().name() + ", host allocation state is: "+host.getHostAllocationState().name());
@@ -220,11 +217,6 @@ public class FirstFitPlanner extends PlannerBase implements DeploymentPlanner {
             s_logger.debug("Cannot choose the last host to deploy this VM ");
         }
 
-        if(!isEnabledForAllocation(plan.getDataCenterId(), plan.getPodId(), plan.getClusterId())){
-            s_logger.debug("Cannot deploy to specified plan, allocation state is disabled, returning.");
-            return null;
-        }
-
         List<Long> clusterList = new ArrayList<Long>();
         if (plan.getClusterId() != null) {
             Long clusterIdSpecified = plan.getClusterId();
@@ -365,13 +357,6 @@ public class FirstFitPlanner extends PlannerBase implements DeploymentPlanner {
                 continue;
             }
 
-            if(clusterVO.getAllocationState() != Grouping.AllocationState.Enabled){
-                if (s_logger.isDebugEnabled()) {
-                    s_logger.debug("Cluster name: " + clusterVO.getName() + ", clusterId: "+ clusterId +" is in " + clusterVO.getAllocationState().name() + " state, skipping this and trying other clusters");
-                }
-                continue;
-            }
-
             s_logger.debug("Checking resources in Cluster: "+clusterId + " under Pod: "+clusterVO.getPodId());
             //search for resources(hosts and storage) under this zone, pod, cluster.
             DataCenterDeployment potentialPlan = new DataCenterDeployment(plan.getDataCenterId(), clusterVO.getPodId(), clusterVO.getId(), null, plan.getPoolId());
@@ -595,6 +580,21 @@ public class FirstFitPlanner extends PlannerBase implements DeploymentPlanner {
                 }
             }
 
+            if(s_logger.isDebugEnabled()){
+                s_logger.debug("We need to allocate new storagepool for this volume");
+            }
+            if(!isEnabledForAllocation(plan.getDataCenterId(), plan.getPodId(), plan.getClusterId())){
+                if(s_logger.isDebugEnabled()){
+                    s_logger.debug("Cannot allocate new storagepool for this volume in this cluster, allocation state is disabled");                    
+                    s_logger.debug("Cannot deploy to this specified plan, allocation state is disabled, returning.");
+                }
+                //Cannot find suitable storage pools under this cluster for this volume since allocation_state is disabled. 
+                //- remove any suitable pools found for other volumes.
+                //All volumes should get suitable pools under this cluster; else we cant use this cluster.
+                suitableVolumeStoragePools.clear();                
+                break;
+            }
+
             s_logger.debug("Calling StoragePoolAllocators to find suitable pools");
 
             DiskOfferingVO diskOffering = _diskOfferingDao.findById(toBeCreated.getDiskOfferingId());