I am back with this one and I got the result from ITS sequencing as Psathyrella panaeoloides. As the name suggests this Psathyrella look like a Panaeolus so it is a consolation for me for opting to be a Panaeolus. Schupfnudel you were right on suggesting Psathyrella!!! I was confused between the two but stipe was a bit flexible and the deposits on the cheilos were so much misleading (and the white edged lamellae too)!
Comparing with this excellent report:
Psathyrella-panaeoloidesDaD.pdf
My collection have those ' rectangular ' spores, in the right sizes and some comments make reference to cheilocystidia having deposits on the top. So we are good!