Now in the retrospect, it was my fault all the way.
I totally forgot to change the engine oil for the past 7 months or so (I usually change oil after every 1500-2000 km) but somehow it slipped out of my head this time, and when the mechanic unbolted the drain hole, it was almost dry and he had to blow inside in order to drain the remnant oil, it was tar black.
Now I am being given an estimate of Rs. 10,000
I hope that after this everything will be fine.
Moral of the story: Never forget to change oil in time