Hello Bhanu,

Checking the ticket that you have opened previously, the main issue is that your Diagram is using a predefined layout. The "tree" layout is designed to order the shapes in a tree-like structure. By definition, a tree has a single root element that has one-way connection to its children elements and the children elements have a one-way connection to their children. When you add a connection from a child to the root element, the tree structure is broken and the Diagram can no longer load this layout properly. Currently, all Diagram layouts depend on one way connections between an element and its children. 
What you can do is set layout: null for your Diagram. This will require you to provide explicit x and y coordinates for each shape added to the Diagram but it will also let you add connections in any direction without breaking the arrangement of shapes.

Regards,
Tsvetina
Progress Telerik