When the promo aired my thoughts were the same. I even called him Neil hypocrite Khanna. How can he be so hypocrite? But then as the episode played out, Neil has his own reasons.
First of all, he had only two options in front of him and he had to choose immediately. He chooses the less damaging one to Avni. He can not hand her over to Vidhyut, especially considering the fact that Vidhyut kept the mother of his daughter in a brothel to be sold off.
Second of all, why didn't he tell anything to Avni? there are two factors, Both DD and Swetha indicated about Avni's plans to run and As Neil sees it, Avni is not in the best of her mental state. "Who shot Juhi?" - "Dayavanti Mehta." That answer itself gave away her vulnerable state. She kept having these episodes of mixing past and present. Neela witnessed it and that can very well be the reason Neela sided with Neil this time.
She chose a less damaging option where he can keep her close to him. The option is a little selfish one completely ignoring Avni's feelings and the things she had to endure. But he did what he normally does, he protected her from a bigger enemy but opened a wound in her heart which will take time to heal.
The decision is wrong, but IMO Neil Khanna is justified. And what is a love story without some MU tadka.