@asad01 ! You sir, are awesome. Thanks for coming back to the thread.
The thing is, i have already tested it with like 10-11 shops' psi gauges, and i have noticed that it shows almost correct pressure with a high-pressure tyre, like a Car's Tyre. Its also shows pretty much same reading (with average minimal difference of 5psi) when compared with a Car-wala's gague (that huge dial thing, usually on petrol pumps).
The primary reason why he refused to change it, was because the gauge itself was showing accurate pressure. But with a bike's tyre, the difference is just ... well, weired. I say weired because when i go to bike shops (the small local ones), their gauges almost always show a very high amount of pressure (which i consider correct as you can tell by feeling the tyre or its performance/grip on the road), as compared to mine.
So yeah, as i am stuck with it. I have made a note of 10-12psi (i couldn't pinpoint the exact difference because of too much variations), when i check my (or any other) bike's tyre pressure (both cold or warm). I am obviously not at all 'Happy' with this purchase, and would consider this Rs.650 a waste of my money. But its still better than nothing.
I'll see if i can find a friend or someone who could bring me a better quality one from abroad.
P.S. I am unable to find a link to a similar device you have. Could you show me more details on it? A webpage maybe?