Why did KLM let me go through Amsterdam first time ? I have sent 2 emails but no reponse yet. should i pursue legal recourse ?

What the airline officials told you is probably correct. They may have determined that you did not have the credentials to enter Holland and that you would be denied entry there if you were permitted to return to Amsterdam. Yes, you did get in and through there the first time, but perhaps after you were there the Dutch immigration or customs agencies learned that you were not supposed to be there in the first place.

For all international travel originating from the USA, I recommend contacting the consul offices near you of the countries that you plan to travel to and through while en route. Some nations have better information than others. In this day and age of computers it may be possible for some foreign government to mistakenly think you are a person not qualified to enter their country. Prior felony convictions in the US, sometimes even DUI convictions, and occasionally bankruptcy can keep you out of some countries. This is why it's always a good thing to check your status a head of time.

I JUST had a client with a similar scenario.

The airline let the passengers board, coincidentally to India, but when they got there their Visa's were expired by 3 days and they were not allowed in the country.

You may want to hire an attorney to contact the Airline on your behalf and you never know what the outcome may be.

If you would like to discuss further you can call me at 312-532-8554 or looplaw@gmail.com.