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Dear nmshah! thanks for the support here,
Did the same as instructed above, I didn't noticed any change yet, there is no betterment in formatting (I might look into deeply and if some thing noticeable, will share with you).
Actually the problem is that "Block Summary" field does not have any formatting option at all, it does not support any editor. The work of editor relates to "Articles Body", but has nothing to do in "Block Summary" And on the index page of the module it shows summary, so there is no formatting possible at all.
If we use copy paste option, like from MS Word, all the formatting goes off, even if HTML code is copy pasted, it still has no impact.