Thank you. Any idea why this is happening, as clutch seems to be working otherwise?
What do you mean by "working otherwise"? I would think, if the clutch were stuck, which it appears to be, you would get a terrible slam and stall the engine when you put the bike in gear.
You may be able to free the clutch by putting the tranny in gear (I'd suggest 2nd), pulling in the clutch lever, and violently rocking the bike forward and back. If that doesn't succeed in freeing the clutch, you'll have to take it apart.