Solution: This is a bug in Excel and is likely to be fixed in future. There are two ways to overcome this problem.
1. Add the title to a textbox and format the textbox as needed. (Selecting the chart and typing inside will automatically add a textbox to the chart)
2. In the Value for Y axis (Chart options) add the title and append few spaces followed by a period (or any other character). The spaces and the period (or the last character) will be clipped.