Hello, Somehow managed to get this right. While running the Matchless,the first gear is smooth, so is the 3rd and 4th, however the second gear keeps slipping (The bike is moving but with frequent slip).Shiftingfrom 3rd to 2nd the shif is like I am doing without using the clutch and it shifts with a jerk. Is it time to replace something? 
J.M

Well somethings obviously not right. Providing any adjustments are correct I would think a stripdown and an examination for worn or damaged parts is the place to start.

Looks as if the sliding clutch on the layshaft is not engaging properly, I would first check the end float of the layshaft and the striker forks for wear and straightness.

Rgds,
Peter

Check your inner clutch hub. It might be worn splines. A common problem. I've seen plenty stripped.

Thanks for the wonderful replies. Now assuming that the selector forks are bent, how do i straighten them? is there any specific process for this? and the wornour clutch splines as well.
J.M

Hi I seem to have solved the problem. The bearing in the inner gearbox cover seems to be loose. Though it is held in place by a lock, there is significant movement of bearing and there for mainshaft play. I will check if this works.
J.M