I figured out the issue with the gpg command line. The second command line worked just fine.
echo Mypasspharse|gpg.exe --passphrase-fd 0 -o "C:\successtest.txt" --decrypt "C:\testfile.txt.gpg"
Issue Was :
Mypassphare contained a character ">" which interpreted as std out redirect in windows command prompt. So, passphase wasn't passing to the next command properly.
Since this command worked properly, I didn't check on other syntax. Please feel free to check other commands and update here, if its wrong.
I have summarized the Q & A here: http://techsharehub.blogspot.com/2014/09/gpg-public-key-decryption-failed-bad.html