I have followed the steps and it worked just fine.
1) Open the file present at : \sqldeveloper-3.2.20.09.87\sqldeveloper\sqldeveloper\bin\sqldeveloper.conf and delete the line with setJavaHome xxx .
2) Click on Sqldeveloper.exe now and browse for the java.exe present in \sqldeveloper-3.2.20.09.87\sqldeveloper\jdk\jre\bin
3) This should launch SqlDeveloper now.
Thanks.