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Consent framework does not come up when multi tenant Web API is used with multi tenant Web App

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I have configured a multi-tenant web application and a multi-tenant web api in my AAD.  I have followed the same instructions that were provided for Single page Azure AD dotnet sample. The only difference is my Web Api is a django based application and not a .NET project. When configuring the web application, I added the web api in the permissions to other applications section. However with this configuration the consent framework dialog does not come for a user from another AD and I get an error from Azure "The application needs access to a service that your organization has not subscribed to. Please contact your administrator." If i remove the web api from the permission to other applications section, then the consent framework dialog comes up. 

Is my web api configured incorrect in Azure AD. I have followed the exact steps provided in this msdn doc - https://msdn.microsoft.com/en-us/library/azure/dn132599.aspx#BKMK_Accessing


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