There's no 1N4148! There's series circuit of 1N4148 and 56V zener, iy you can trust the datasheet! This will very probably destroy the LEDs, because they aren't designed to withstand such a high reverse voltage.

Ok, Sivanand, let me explain how a free wheeling diode is working. Imagine the following brain experiment:
If you connect pin 3 of your relay to 0V, while having pin 2 connected to 5V, then a current is flowing through the relay. This will generate a strong magnetic field within the coil of relay.
If you now abruptely disconnect pin 3 of relay from 0V, the magnetic field is collapsing and by this producing a high voltage across pin 2 and pin 3 of relay, the so called inductive kick.

As pin 2 is still connected to 5V, at pin 3 (which is disconnected now from the rest of world) a voltage can be measured which is many many volts more positive than +5V. You can easily measure hundreds of volt here.

The idea of this free wheeling diode is now to limit this voltage at pin 3 of relay to 5.7V. Why exactly 5.7V?
Just one diode voltage drop more than 5V.

But datasheet says that a zener is here connected to the relay, which allows a voltage of about 56V across the relay coil. If this is true, then the LEDs will see a too high reverse voltage and are in risk to be damaged.

Kai