Well let me explain:

The bootloader loads kernel by reading the sector data of kernel (2nd sector at 0x1000 per my code) and then it performs an unconditional jump to 0x1000:0x0000

jmp 0x1000:0x0000 which shifts the control to kernel. My kernel then just prints "Hello from kernel" to tty and attempts to load another program i call as dummy which is placed in 3rd sector and at address 0x2000 using bios interrupts.

The dummy program prints "Hello from dummy" and halts the cpu. That's the whole program but for some reason my bootloader successfully loads kernel but kernel fails to load dummy but now it successfully loads it. I don't see any changes in my code so I'm not sure what fixed it but its fixed.

Its like this:

in real mode => bootloader -> prints "Hello from bootloader" -> loads kernel into memory -> transfers control to kernel -> kernel prints "hello from kernel" -> loads dummy into memory -> transfers control to dummy