Thanks for the reply Maru... and thanks for appreciating the design ( done by the Architect Nachiket - Isha)
I think the crash is related to the proxies and C-scatter.
I have realized that the crash is not happening when there are no proxies and C-scatters in the scene.
How did I check :
1. I deleted all the proxies from the scene, kept only the C-scatters along with basic scene ( 381323 faces); still it crashed.
2. Then I deleted the C-scatters too and kept only the basic scene ( 381323 faces); now it did not crash.
3. I opened new scene which does not have any proxies or C-scatter and closed it, opened another scene, merged objects but no crash.
Please note that this crash is happening while opening, closing the scene or while merging objects in the scene.
( One small observation - though experts cud be knowing it, this is for newbies like me)
C-scatter was making my viewport activity very slow. Activities like selecting objects, moving, rotating them, zooming in were very slow. As soon as I reduced the 'Displayed %' of C-scatter to 1 ( from 100) the viewport became normal.