Does it cause all the threads,I mean all the users to stop and
increase the wait time http request queue and start to affect the
availability of the application
It depends on the exception. For example, OutOfMemoryException will affect all users.
On the other hands, FileNotFoundException wouldn't affect other user.
If so should we make sure there is no exception left over in an
asp.net application to ensure scalability of the application.
Well, we all developers try to write bug free code, but sometimes things slip out of our hand. It is why we use logging to catch run-time exceptions - such as Log4Net, NLog.