S Balachandran, a diplomat at the Indian Consulate in Shanghai was rushed to hospital when he fainted after being "manhandled" by the crowd that tried to snatch two kidnapped Indians who clung to him.

The incident happened when he was leaving the court after prolonged negotiations on the night of December 31.

The two Indians had been held hostage by the local traders for two weeks for non-payment of dues by their company, whose owner had allegedly fled the country.

Riva Ganguly Das, the Consul General of the Shanghai Consulate of India said that Balachandran, working as Consul at the Consulate fainted when he was "manhandled", while attempting to get the release of Deepak Raheja and Shyamsunder Agrawal.

Balachandran, 46, tried to negotiate for their release for over five hours at a court in Yiwu, a big trading centre for a host of commodities.

He was assaulted when the two Indians, being held captive for over fortnight clung on to him to leave the surcharged place. The incident took place in the court and in the presence of police and the judge.

A high drama ensued as the crowd prevented the two from going along with him demanding that they pay millions of Yuan owed to them for commodities purchased from them.

They later pounced on them and snatched the two from Balachandran, who in the process suffered injuries especially to his knee. A diabetes patient, Balanchandran fainted after the assault.

Balachandran was rushed to the local hospital in an ambulance in a semi-conscious state by local officials and some Indian traders based in Yiwu.

Local officials reportedly apologised to Balachandran after the incident.

Though the court said Deepak and Shayamsundar were free to go, they remained in police custody fearing attack by the crowd. They too suffered injuries in the incident.

Balachandran was admitted to a hospital in Shanghai on Sunday where he is undergoing treatment for his injuries. His condition was better and he is currently undergoing various tests, Das said.

The two Indians are lodged at a police station and the Consulate has appointed a lawyer to secure their release.

The two were held as captive after the owner of their company, Euro Global Trading, fled without paying the dues of local suppliers. The owner was stated to be a Yemeni or a Pakistani national.

The two Indians hailing from Mumbai say they were employees of the company but the local Chinese suppliers assert they will be released only after they pay the dues. Their families were in touch with the Indian Consulate officials to obtain their release.

Over 100 Indian traders stay in Yiwu which is the centre of commodities trading.