Thanks for all the responses.
This thing is yeah, backup was running fine with no issues till it suddenly stopped. There haven't been any change in account, permmission or anything. Firewall has been the way its been, off on both servers
I also tried to backup to the same server using the UNC path, i,e \\MAINSERVER\e$\Backup\databasename.bak and it still failed but when i used E:\Backup\databasename.bak it backed up.