@newguy,
Can anyone throw more light on this behavour of Capistrano or suggest
me better ways to go about this problem.
Use Git. There's fewer and fewer good reasons to use SVN these days, and I haven't touched Subversion in years, I'd recommend switching to more modern source control system. (or of course stop using the remote cache).
This isn't a known issue with SVN, nor is it anything that has cropped up on the mailing list/support communities before, so I have to assume it's something specific to your environment.
- Lee (sorry that's probably not the answer you were looking for)