Why is Drupal prepending 'node' to the link URL?
the issue (for the current scenario) turned out to be hardcoded link in the page.tpl.php file. the front page was working ok as it had its own custom template but other pages were using the page.tpl template for rendering the links. 

seems that sometimes small issues goes undetected. :) . just leaving this answer so that someone else may also look into such a possibility in their case.