Oracle 18c

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CREATE TABLE "check" (customer_id int, check_flag varchar2(1));
INSERT ALL 
    INTO "check" (customer_id, check_flag)
         VALUES (1, 'y')
    INTO "check" (customer_id, check_flag)
         VALUES (2, 'y')
    INTO "check" (customer_id, check_flag)
         VALUES (3, 'n')
    INTO "check" (customer_id, check_flag)
         VALUES (11, 'y')
    INTO "check" (customer_id, check_flag)
         VALUES (22, 'y')
SELECT * FROM dual
;
5 rows affected

CREATE TABLE relationship (customer_id int, related_customer int);
INSERT ALL 
    INTO relationship (customer_id, related_customer)
         VALUES (1, 1)
    INTO relationship (customer_id, related_customer)
         VALUES (1, 2)
    INTO relationship (customer_id, related_customer)
         VALUES (1, 3)
    INTO relationship (customer_id, related_customer)
         VALUES (2, 1)
    INTO relationship (customer_id, related_customer)
         VALUES (2, 2)
    INTO relationship (customer_id, related_customer)
         VALUES (2, 3)
    INTO relationship (customer_id, related_customer)
         VALUES (3, 1)
    INTO relationship (customer_id, related_customer)
         VALUES (3, 2)
    INTO relationship (customer_id, related_customer)
         VALUES (3, 3)
    INTO relationship (customer_id, related_customer)
         VALUES (11, 11)
    INTO relationship (customer_id, related_customer)
         VALUES (11, 22)
    INTO relationship (customer_id, related_customer)
         VALUES (22, 11)
    INTO relationship (customer_id, related_customer)
         VALUES (22, 22)
SELECT * FROM dual
;
13 rows affected

SELECT r.customer_id,
       COALESCE(MAX(CASE WHEN c.check_flag = 'n' THEN c.check_flag END), 'y') paas_fail_flag  
FROM relationship r INNER JOIN "check" c 
ON c.customer_id = r.related_customer
GROUP BY r.customer_id
ORDER BY r.customer_id


CUSTOMER_ID
PAAS_FAIL_FLAG


1
n

2
n

3
n

11
y

22
y