After half an hour drive I was just checking the water pipes in my Khyber's engine bay when I found out that the rubber pipe which takes water to heater matrix (in dash) was hot while the return pipe was cold, which means that due to some blockage in heater matrix the hot water was not being circulated. That is why the heater was not giving hot air.
Went to A/C workshop and the guy there told me that whole dashboard needs to be removed in order to take heater matrix out. I use to get my car's A/Cs serviced from this guy, he knows his work and is quite reasonable in prices as well. He removed the dash, took the heater matrix to radiator service shop. It was good in condition (not rusted) but was blocked.
Installed it back after service and now Alhamdulillah the heater working is superb.
The blower speed was low so I also got a rely installed with it. Last year I wanted to install a rely with blower but the car was not switching off after the ignition being turned off. The blower needed to be switched off first to switch off the car, so I did not install it, but yesterday he has installed a rely with a component "Electrofier" (as being called by these ustaads) and now the blower is also working great without any issue. The car switches off regardless of heater on or off.
However the most interesting and weird thing is that after the heater work, the problem of engine running cold is also resolved. Although it should be the other way round i.e if the heater is throwing good amount of heat, the engine temperature should come down but in my case, the temperature has gone to optimum/ normal level now.