Is it possible that derivative of a function exists at a point but derivative does not exist in neighbourhood of that point.
If this happens then how is it possible. I feel that if derivative exists at a point then the left hand derivative is equal to the right hand derivative so derivative should exist in neighbourhood of that point.
This is not exactly an answer to your question, but I think the source of your confusion is that you seem to believe that the left/right hand derivatives $$f'_\pm(a)=\lim_{h\to 0^\pm} \frac{f(a+h)-f(a)}{h}$$ are the same things as the left/right hand limits of the derivative $$\lim_{h\to 0^\pm} f'(a+h).$$ They coincide in simple cases, but not in general. For example, if $$f(x)=\begin{cases}1,&x \ge 0 \\ 0,&x < 0\end{cases}$$ then $f'(x)=0$ for all $x\neq 0$, so $\lim_{x\to 0^\pm} f'(x)=0$, but $f'(0)$ doesn't exist (since $f$ is discontinuous at $x=0$). More precisely, the right hand derivative $f'_+(0)$ is zero, but the left hand derivative ${f}'_{-}(0)$ is undefined.