All of them were using conversations.
Later on some switched to blabber.
The issued remained the same which lead me to the conclusion that its the server or something else.
I tried snikket server too and that one works with no problem when it comes to avatar and MUC which i have explained here https://discourse.igniterealtime.org/t/muc-omemo-works-on-only-for-some-users/90774