As stated above the engine had it's fair share of rough time.
It was taken out by the mechanic on 2nd or 3rd day. Upon inspection when he opened up the complete engine and transmission we got the clear picture.
Everything was a complete mess. Bad pistons, oil rings, valve seals you name it.
The mechanic was of the thought that the engine was already overhauled and to some extent I agree with him.
The transmission was also from another world. During the test drive earlier it would sometime popped into neutral from 5th gear and sometimes didn't went into 2nd gear. This sneaky little manual wanted to be like a automatic when it grows up 

.
When opened this was because the 2nd and 5th gear synchronizer ( if I am correct) also called garari by local mechanic was broken.
Although the clutch pressure plate and disk was 9/10 reason it was changed recently by the owner.
The trans fluid was twin brother of mud.
So in the next 2-3 days we bought the complete rebuild kit. The mechanic and khairadia started their work.
The engine and transmission was completed and put together in last week of July and since then it is resting in mechanic place safe from all dust and dirt.
Here is the bill for rebuild kit.
For those who has difficult time understanding,
Piston
Rings
Engine main bearing
Engine kit (gaskets+seals)
Silicone
Timing belt
Water body/pump
Valve oil seals
Timing bearing
The gear synchronizer+bearings costs Rs5000.
Flywheel+ disk polishing Rs 2500.
Plus khairad labour Rs10,000.
Plus extra miscellaneous items Rs 3000.
So Total bill.
17500+ 5000+ 2500 +10000 + 2000= Rs 38000
These are the rates of best quality parts I could get in my city. Cheaper ones would have saved me some 6-8k.
So keeping in mind the prices of kabli engines which is around 150k that is also a gamble because 80% have already completed their life.
But on other side the low quality of parts and workmanship in our country compel one to not go for rebuild.
Many members here on pakwheels forums also complained about the quality of overhauled engine through out Pakistan which starts to go bad after 20-30k km.
So Spending 40k on rebuild is a good choice knowing that it may not last as long as a OEM one?
Please share your thoughts.