Digital Output wiring

Hi,

I am using Compact solid-state 24V DC sink output module in the panel. As it is a sink output type, what happens if my module fails? Does the system will still allow the current flow through the relays when the module fails?

It depends on the nature of the failure. Since it is not an inherently safe unit any failure mode could take place. I don't think the likelihood of this is different between sinking and sourcing units.

A “sink” output and a “relay” output are two very different things. A sinking output provides a path to ground through a solid-state circuit usually at a low capacity (100 to 200 mA). They are generally used to drive relays and are used to provide flexibility. If your PLC/PAC has a sink type output meant to drive an interposing relay, then the relay can be a type and size to fit the application where as if you have the relay within the PLC/PAC then it needs to be compatible with the application and when it fails (which it will at some point in time) you generally have to replace the whole PLC/PAC or an I/O card.
A relay output is just that, a physical relay built into the PLC/PAC or a modular card and it will have a physical set of contacts. They typically can handle a much higher load than a sink output can but the drawback is that they are limited to their specs and when damaged or worn out the entire PLC/PAC or card must be replaced.
In your case, if the output fails, it can fail in a state where it will “leak”. Typically when this happens it’s not enough to drive a relay (only a few milliamps) but they can fail with enough of a current leak to allow the relay to close.