Why do I get "Error Class Code: 1", while updating the systems or while registering new system with an activation key ?

Issue

• While running rhn_check and up2date/yum` commands on RHEL system, it fails with "Error Class Code: 1"

        # up2date sos 

        Error Message: 
            xxx Account has been deactivated on this server. 
                       Please contact your Org administrator for more help. 
        Error Class Code: 1 
        Error Class Info: This does not appear to be a valid username. 

• Can not update systems registered with activation key owned by the deactivated user.
• Kickstart installation from the Red Hat Satellite server fails with "Error Class Code : 1 " error.
• Systems registered via activation key not able to checkin with satellite after deactivating the user who is owner of that activation key. It fails with "Error Class Code: 1" error.