Peculiar permission problem

Scenario:
Step 1. I'm logging into AIX server using user id called user1
Step 2. I'm traversing to home directory of user2
Note: This user2's home directory has the permissions drwxr-s---
Step 3. I'm issuing command pwd there. I'm getting the expected output.
Step 4. I'm issuing the command /usr/bin/pwd here. But this time, I get an error saying "Permission denied".
Note: which pwd gives the output /usr/bin/pwd

Question:
Any pointers on why pwd is giving the present working directory name whereas /usr/bin/pwd is giving permission denied error?

Thanks.

What are the permissions on /usr/bin/pwd? If it also has the sgid bit and is in the a different group than the directory, then you are getting the expected result.

Here is the permissions for /usr/bin/pwd

-r-xr-xr-x

Owner and group are bin and bin as listed in ls -l.

For the user2's home directory, the owner and group are user2 and devgrp

I'm not sure how this is happening then. Does /usr/bin/pwd work when you first log in? I guess I would try to find which directory is unreadable bu doing:
cd .. ; /usr/bin/pwd
until it works. This might give a clue.