Finally I managed to solve my issue and it was due to spark plugs and plug coils. I have replaced all 4 spark plugs with NGK iridium and it turns out that most of the plug coils are also covered with carbon deposits (don't know "carbon deposits" is the correct term).
My regular mechanic cleaned them with carburetor cleaner and advised me to replace them soon because most of them are getting weak.
After replacing plugs and cleaning out coil pack, issue completely vanished and feels like a new car. Pulling power and fuel economy seems much better almost after 800Kms journey
However before complete the above procedure I have taken my car to the agents (Stafford - Boralasgamuwa) and must say that their service is quite disappointing.
After getting details about the issue one of the technicians highly suggest that it could be a gear box issue (even before a test drive) and not related to the ignition system. Luckily I got another technician and he sounds more fair than the first one and we went on a test drive with OBD 2 scanner plugged in. They managed to replicate the issue and cam back to the station and suggest me to do a engine tuneup and injector replacement. Weird thing here is they said it could hardly be the plugs and coils causing this issue and we would be able to make sure after the tuneup and injector replacement. Estimated cost for the total job is quite high so I declined and they have found out one of my rear wheels has a break bind and fixed it (and mentioned that perhaps this could be the cause for engine hesitation).
After return I went on a test drive with my OBD 2 scanner plugged in and the results turns out that there is a drop on all graphs when the engine reached 1500 RPM and started knocking. Then I have contacted a friend in D*MO and he advised me to replace plugs.
So for Auto Lanka readers few advises if you own a Honda,
1. In my experience Stafford doesn't know or they simply don't care to find out the real issue but trying to diagnosis issues by replacing parts one by one.
2. Some popular names (such as Honda U*ul Malabe) also wont help as I feel that they should have identify my issue because that's the first place I went for opinion and did a full engine tune up. They didn't mention anything about bad plugs and didn't check the plug coils at all...!
Thank you @NeroX and @MV-5 for helping me, really appreciate your advises.