An Indian diplomat based in Shanghai was ill-treated and had to be hospitalised, prompting India to lodge a protest with the Chinese authorities.
S Balachandran, 46, a diabetic, was attending a court hearing in Yiwu city near Shanghai on December 31 when he fainted after being denied permission to go out of the courtroom till the proceedings were over.
His condition deteriorated later and he had to be admitted to a hospital, where he is currently recuperating, officials said.
Balachandran had gone to the court in connection with a case related to the kidnapping of two Indian traders.
Not taking the incident lightly, the Indian government has lodged a protest with the Chinese authorities in Beijing, Shanghai as well as in New Delhi.
Zhang Yue, deputy chief of the Chinese mission in New Delhi, was summoned by the external affairs ministry and told that this was not the way to treat a diplomat.
Sources said Zhang was told that since Balachandran was a diabetic, he required regular intake of food and should have been allowed access to it.
"This seems to be a civic-commercial dispute. We would do our best to handle this properly," Zhang said.
"I just listened to the officials from the MEA about what has happened. We are trying to find out what had happened actually," he said.
Similar protests were lodged by the Indian consulate general with local authorities in Shanghai and by the Indian embassy with the foreign ministry in Beijing, sources said.
Riva Ganguly Das, India's consul general in Shanghai, told PTI earlier that Balachandran fainted when he was "manhandled" while attempting to finalise the release of Deepak Raheja and Shyamsunder Agrawal.
The two Indians had been held hostage by the local traders for two weeks for non-payment of dues by their company, whose owner had allegedly fled the country.
Balachandran tried to negotiate their release for over five hours at a court in Yiwu, a big trading centre for a host of commodities. The incident took place in the court and in the presence of policemen and the judge.
A high drama ensued as the crowd prevented the two from going along with him, demanding that they pay millions of Yuan owed to them for commodities purchased from them.
They later pounced on them and snatched the two from Balachandran, who fainted afterwards.
Balachandran was rushed to the local hospital in an ambulance in a semi-conscious state by local officials and some Indian traders based in Yiwu.
His condition was better and he is currently undergoing various tests, Das said.
Local officials reportedly apologised to Balachandran after the incident.
Though the court said Deepak and Shayamsundar were free to go, they remained in police custody fearing an attack by the crowd. The consulate has appointed a lawyer to secure their release.
The two were held captive after the owner of their company, Euro Global Trading, fled without paying the dues of local suppliers. The owner was believed to be a Yemeni or a Pakistani national.
The two Indians say they were employees of the company but the local Chinese suppliers assert they will be released only after they pay the dues.
Their families were in touch with the Indian Consulate officials to obtain their release.