its customary when reporting an issue with code that doesnt work, to supply error messages from the console that describe the fault.
Can you do this ?
also, be aware that we don't have your kml object, and so couldnt possibly identify any problem there might be with it...
but what is a KML file ? in the readOGR documentation 'KML' is referred to as a driver.
what is the origin of this District Baddi Map 4 Layers.kml ?
Before using alternate data, its always worthwhile, using data bundled with the package , that is referenced in the examples for using that package.
Recommend you type ?readOGR in the console, and run the example code, to verify that it works on the example data that rgdal provides