Ok I think I found the issue with hdmi output. This box seems to support only Dolby Digital Plus on HDMI out when multi channel is selected. When I give the input to TV directly, the sound is coming. My home theater doesn't support Dolby Digital Plus, it only supports Dolby Digital. This explains why audio doesn't come on my home theater when multi channel on hdmi is selected. The issue is only with HD channels, normal channels are fine on HDMI too because they are not Dolby Digital Plus.
@Vadirocks bro, Please confirm you are using a home theater that supports Dolby Digital Plus.
Another important thing I found with subtitles on HBO HD. The subtitles on this channel are soft subtitles. On the N series box, we can turn off the subtitles on this channel using the OSD option in menu. I think this option is not working on the U and Y series boxes which is why subtitles aren't shown at all on those. I think this can be fixed with a software update.
The nodal team called me this morning, I told them about the audio issue. They are sending the technician now with Y series box and a HDMI cable. He will check with that cable and if it still doesn't work he will replace the box with Y series box.