After my friend lost to Jackson at the school in Viridian City, he cannot rematch Jackson again and cannot proceed with the story. The NPC on top disallowed him to go beyond there and ask him to challenge Jackson again. Please help and solve it.

 

My friend and I were just start this game and was highly anticipate for its awesome mechanism but now this bug is making us wanting to quit.

This is not a bug, getting defeated by jackson will open a new side-quest in order to proceed. Talk with the NPC's and read their dialogs closely.

This is not a bug, getting defeated by jackson will open a new side-quest in order to proceed. Talk with the NPC's and read their dialogs closely.

 

Okay thanks, I'll ask my friend to look through it again.

Would it happened if I defeated by non-story related NCP as well? As I had lost to an NPC once and black out, and when I try to challenge him again but he refuse to.

non-story line NPC's have their own cooldown timer. Which changes between 24 hours and a week, depending on their importance.