Hi,
We were able to find the root cause of the issue.
We had recently added a SmartEvent server and configured the Management server to forward logs to the event server for correlation. As per sk106039 the logs are deleted after forwarding to the Event server and this is why we get the error in SmartLog.
We have not yet changed the forward_log_without_delete to true as per the SK. As a workaround we are choosing the SmartEvent server as the log source in SmartLog and clear the checkbox for the management server.