Okay, now I understood what’s happenings.
While debugging I was getting the same issue. But then I realized that activating guest checkout allows the user to purchase without any issue, however, the account is not created automatically unless she opts for it.
I was of the notion that an account will be created for all persons even if they didn’t opt to create an account. However, if they opt for the same it’s creating an account and sending out the mail perfectly. Further, the custom checkout plugin I have been using also does the same but makes the user create a password on their own on checkout rather the generating automatically then sending out the mail to reset.
I am still a newbie, learning and making a store of my own will bring these kinds of issues, thanks a lot for your replies it helped a lot.
Further, I have one question, should the following setting be turned off/on if we are running a WooCommerce store.
Settings > General > Membership – any one can register.