There is an ever increasing need of providing quick, yet improved solution to dynamic scheduling by better responsiveness following simple coordination mechanism to better adapt to the changing environments. In this endeavor, a cognitive agent based approach is proposed to deal with machine failure. A Multi Agent based Holonic Adaptive Scheduling (MAHoAS) architecture is developed to frame the schedule by explicit communication between the product holons and the resource holons in association with the integrated process planning and scheduling (IPPS) holon under normal situation. In the event of breakdown of a resource, the cooperation is sought by implicit communication. Inspired by the cognitive behavior of human being, a cognitive decision making scheme is proposed that reallocates the incomplete task to another resource in the most optimized manner and tries to expedite the processing in view of machine failure. A metamorphic algorithm is developed and implemented in Oracle 9i to identify the best candidate resource for task re-allocation. Integrated approach to process planning and scheduling realized under Multi Agent System (MAS) framework facilitates dynamic scheduling with improved performance under such situations.