Just wanted to update it got fixed, without re-intalling windows.
I did a couple of things with a guy from nearest dell partner who provided me free technical support at their center, He guided me a little and I did a few things on my own. I don't know what fixed it but I'll go on chronologically.
First I downloaded a utility named UsbSafelyRemove and using this I stopped the power to the fingerprint sensor virtually without having to disconnect it, this removed it from devicemanager by preventing it from getting detected for current session. Then I uninstalled the sensor driver software and it was no longer detected aswell. Then I downgraded the bios using Dells Bios Tool, Meanwhile Microsoft or maybe Dell launched an un-logged/unscheduled automatic update and perhaps a possible patch for windows, I don't know if they did it or if it was windows on its own because it wasn't logged. I then restarted the computer, the sensor was detected and appropriate drivers were automatically installed, didn't check for error at this time. Then my antivirus software also found a simple PUP.Optional.OpenCandy malware, which shouldn't likely have any effect. I enabled Microphone for a skype call and just out of the blue the sensor error code 31 which I was checking for frequently, just disappeared. I have now upgraded my bios and the sensor still appears to work. I believe the miracle was due to the windows update most probably, just for reference I was on windows 10v.1909 before and even now, the update was minor a fix perhaps.
I still don't know what caused the error 31, & which particular update fixed the conflict, was it dell support software which was continuously on or windows, but I'm pretty sure its fixed.
Thanks to all those who helped for your time & support.