What are the steps I can take when Kafeel is not ready to handover my passport?

First option is to discuss this in more details with the Kafeel or the employer and let him/her understand further the regulation that your passport should be with you. If after several discussions or pleas and he/she continues to hold on to your passport, you may report this to the Embassy or BMET who in turn will either negotiate with the Kafeel or employer or report it to the local authorities.