If this application is hosted by a Web Farm or cluster, ensure that <machinekey> configuration specifies the same validationKey and validation algorithm. AutoGenerate cannot be used in a cluster” . We looked at the error and realised that we need to create a static machinekey and add it into the web.config of both our IIS7 web servers to fix the issue.
Add following code in web.config.
<machinekey validationkey="AutoGenerate,IsolateApps" decryptionkey="AutoGenerate,IsolateApps">
validation="SHA1" decryption="Auto" /></machinekey>