Hello Deepak,
I think I experienced something like that some time ago in a landscape where the customer used the separated frontend and backend server for e-Recruiting. The issue was a problem with the user creation on the backend. It was either a problem with the RFC or with the authorization (execute function group via RFC), not fully sure as it was some time ago.
For a more detailed analysis I recommend to check the application log (SLG1) on the e-Recruiting system (on both systems if separated frontend and backend server). Furthermore check the system log SM21 that would show if there is any RFC access issue and activate the authorization log in ST01 for the service user.
Kind Regards
Roman
