I have upgraded to httpclient 4.2 and this version has out of box NTML support. Just need to add following lines to the code
HttpClient httpclient = new DefaultHttpClient();
NTCredentials creds = new NTCredentials("user", "pwd", "myworkstation", "microsoft.com");
httpclient.getCredentialsProvider().setCredentials(AuthScope.ANY, creds);
For further reading Httpclent authentication scheme u can refer http://hc.apache.org/httpcomponents-client-ga/tutorial/html/authentication.html#d5e947
But my question is still open, why HttpClent is not picking the system proxy as simple java program does.