In the SharePoint Logs following entries were there:
07/27/2009 09:36:30 8 INF Now joining to farm at server MOSSDBServer database SharePoint_Config
07/27/2009 09:36:38 8 ERR Task configdb has failed with an unknown exception
07/20/2009 09:36:38 8 ERR Exception: System.Security.SecurityException: Access denied.
Since we were using the farm admin account when attempting to join the new WFE, all the required privileges were there.
On further investigation we found that there was a application pool in IIS which was not getting used anywhere and was having a password which was expired. Because of this application pool this issue was coming. We have deleted this app pool. Again the config wizard was executed and it ran successfully.