Ran the the malwarebytes antimalware suggested by Bill and also did a clean Boot for Win7. Nothing seems to be working. The problems to be honest doesn't persist from the moment the laptop is switched on but whenever there is a medium to heavy usage of the system. I notice this in particular when I plug my external drive to put my backed up data into the system. Right now as I type, the memory usage is beautifully showing 6% which is pleasing to the eye.
Could the sudden surge be due to some svchost service running in the background? I see a lot of them btw. I went to services.msc and disabled whatever application I thought was not worth running in my system. Two things I noticed is that the system idle Process shows 95% when the system is using low resources and the tasks always move up and down (For e.g. Firefox which appears number 2 on the Task manager always skips up and down within few seconds. And this happens with most of the applications).
Have included the screenshots of the Task manager with processes running from all users. Thanks again!