Solution

1. The "90-cloud-init-users" file in /etc/sudoers.d/ gets created by cloud-init and adds the following rule for admin user:
   ADDITIONAL INFORMATION:

   For example, for an admin or adminitrative user, cloud-init adds the rule admin ALL=(ALL) NOPASSWD:ALL.

   This file has limited permission. Even the "root" user has read-only access.

   To overcome this problem, move "90-cloud-init-users" file to user's home dir.

   For example, mv /etc/sudoers.d/90-cloud-init-users /home/admin/