Hi Sai;
I understand that you are getting errors while scheduling and it doesn't matter from which ever Web application being used. 
May be I was not clear enough in my earlier points. We needed to know whether any issues are observed if the reports could be refresed in any web application (CMC or BI doesn't matter. Just check this)
In addition provide an update on whether the report can be refreshed from CR client tool.
I do understand that destination to email server might have been configured appropriately, i.e., if we have few other reports getting scheduled appropriately to mail server. Still we must identify whether the issue still occurs irrespective of the destinations being used.
I would again like to re-iterate here to troubleshoot further whether this issue is specific to a report or else couple of reports based on same data connector in the backend.
Any other factors observed would help in case issue is intermittent such as load on server / number of records being retrieved etc.