Hi Saleem,
Perform the following steps to delineate catchments.
1. First, delineate catchments with manholes on DEM. This can also be done in ArcGIS.
2. Once you have delineated/imported the bigger catchments, Try delineating/breaking them through theissen polygon method with Catch pit layer. This is also done through delineating wizard but the only difference is you have to select the existing catchment layer as boundary polygon.
3. After performing this you have to make some correction in catchments as this will make some gaps in the catchment layer.
Whether you should first delineate catchments with catch pit layer or manhole layer, this depends on how equally distributed your catch pits/manholes are.
Med vänlig hälsning
Mohit