The problem lay in the very beginning of the program code and not the hardware,which is why changing the RTC chip didn't make the problem go away. In my program, I had used some flags (for the sake of i2c communication) created on the bit-addressable RAM ranging from bit 46(2Eh) to bit 50(32h),which incidentally coincided with the storage locations for minutes and hours. Bits 46 and 47 were part of the upper nibble of 8-bit storage used for minutes value. Bits 48,49 and 50 were part of the lower nibble of the 8-bit storage for hours value. As these bits changed frequently during the operations, hence there was inconsistency in the value stored when read from the RTC and the value that came out on the LCD. Changing these bit locations solved the problem. phewwwwww!!!!!