Thank you all for your valuable suggestions. You all are a legend. I had a look at the problem this morning again. Seems that the location of the exit point in the fuse is wrong. Because of this, the wire is binding at the exit point. The fact that the wire is nylon coated and is not smooth (it is sort of ribbed) on the outside, it is causing a lot of friction with the fuse. I have cut the fuse to create a slit rather in place of a hole for the wire to travel. With this, the problem is more or less fixed. There is yet another problem that I need to fix and I hope after that, the problem will be fully rectified. This other problem is that the wires are touching the top of formers inside the fuse. I think I'll need to raise the height of the servo ever so slightly so that the wires go clear past the formers.

Thanks once again to all of you.

Cheers,
Rajeev