After receiving details from haasman, I proceeded to adjust the bowden cable.
Upon inspection, there was considerable cable slack (approx, 1/4 inch), so I backed-out the adjuster by 2 turns (anti-clockwise) and went for a drive.
With gentle accelaration, 3rd gear held till 2100 rpm (instead of 1600 rpm) . The car did not bog-down and felt more lively to drive.
With brisk accelaration, 3rd gear held till 3100 rpm.
After some additional minor adjustments, I have finally settled on the adjuster backed out 2 and 1/2 turns (anti clockwise) from the initial position.
The car is transormed!
Thank you Haasman
1991 190E 2.6 170k
1995 E320CA 57k
1999 Chevy Tahoe 98k
2000 R1150GS 45k
1983 300CD 178k - sold, but not forgotten