I solved the problem by following these 6 steps (to help someone help):
1) Copy the folder in which the conflict arose to your system from eclipse.
2) Delete the folder in eclipse by right clicking, after deletion red cross will be marked.
3) Update the deleted folder via **Replace With -> Latest from Repository**
4) Commit the code, at this point it should commit.
5) Copy the contents that you saved in your local system in that folder by accepting any duplicates that follow.
6) Commit the code again and hopefully you are done without any file loss.
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