I found out that the Auto-Ban was enabled in hMailServer, and my ip address was auto-banned.
I went under Settings > Advanced > Ip ranges, and found out that my ip address was in the autoban list, i removed my IP Address from there, and also disabled auto-ban as i dont require auto-ban, and it started working, and i am nomore getting the net_io_connectionclosed error.
Thanks! This solved my issue. I was able to send out a few emails and then suddenly I started getting the net_io_connectionclosed error. Ineed, hMailServer auto banned me and this solved it.