In 1953 Thorat was sent to Korea as Commander of the Custodian Force of India (CFI). Thimayya had been appointed the Chairman of the five nation `Neutral Nation Repatriation Commission' (NNRC). The CFI comprised 190 Infantry Brigade, under the command of Brigadier R.S. Paintal. It had three infantry battalions, and an engineer company. Later, two more battalions, and a company of Mahar machine gunners were provided. Thorat selected Brigadier Gurbaksh Singh, DSO, as his Deputy Commander. In July, 1953, when the Armistice was signed, about 30,000 North Korean and Chinese prisoners were captured by the United Nations Command. The Korean Peoples Army (KPVA) and the Chinese People's Volunteers (CPV) Command held several hundred British, American and South Koreans, as prisoners. All these were transferred to the custody of the CFI, under Thorat, having refused to be repatriated, after the cease fire. It was hoped that after sometime in custody of the neutral CFI, the effects of propaganda and brainwashing would wear off, and the prisoners would agree to be repatriated.
The first contingent of the CFI left Madras by sea, on 18 August 1953, and reached Inchon on 14 September. The fifth contingent, which was also the last, left on 5 September, reaching on 28 September. They were housed in canvas tents, in three groups, at a place known earlier as Tong-Jong-Ni. Thorat gave it the name Hindnagar, which soon became well known. The prisoners were housed in compounds, with each accommodating about five hundred. Each compound had tents for living, kitchen, dining hall, and latrines. There was a double wire fence around each compound, with the space between them used for patrolling. A number of compounds were grouped together into an enclosure, which also had a double wire fence around it. Initially, prisoners of both sides were quite friendly with the Indian troops guarding them. However, this changed, as soon as some of the prisoners began to ask for repatriation. The other prisoners resented this, and beat up the prisoners, who wanted to surrender to the guards, for repatriation. Sometimes, they even killed such prisoners. The Indian troops tried to prevent such incidents, and this brought them in conflict with the prisoners.
On 25 September 1953 there was an anti India demonstration in one of the camps. Thorat entered the compound, accompanied by a few officers and after talking to the prisoners, left. The prisoners caught hold of the interpreter, Major H.S. Grewal and bodily carried him back into the compound. Thorat turned back and rushed in followed by about a dozen Indian soldiers. The prisoners closed the gates and attacked the Indians held captive inside, with wooden poles and stones, causing injuries to some of them. Thorat gave strict orders to his men not to retaliate since he realised that they were heavily outnumbered. He also ordered the brigade commander, who was out side, not to fire, since this would lead to a massacre, and India's position would become untenable.
Thorat found a POW who spoke English. He started talking to him. He asked them to release Major Grewal, but they refused. Thorat then took out his cigarette case, but it was empty. He said "What sort of Chinese are you? I and my men have been your guests for about an hour but you have not offered us a cup of tea or even a cigarette. Where is your traditional hospitality and the good manners for which your race is renowned?" The prisoner was bewildered at this remark, but soon turned around and barked some orders. Soon afterwards mugs of tea and packets of cigarettes appeared.
The situation changed as if by magic. The Chinese apologised and brought Grewal to Thorat. He accepted their representation and promised to forward it to the NNRC. They formed a guard of honour, and cheered lustily as Thorat left the compound followed by the Indian troops. This incident received wide publicity in the world press. After his return to India Thorat was awarded the Ashoka Chakra Class II (now called the Kirti Chakra), and the Padma Shri for his courage, composure, and presence of mind in preventing an ugly situation which could have caused several deaths.
On 15 October 1953, 'explanations' started. A large number of North Korean and Chinese prisoners, captured by the UN Command, had refused to be repatriated. The KVA-CPV Command contended that this was because false information had been given to the prisoners regarding the conditions prevailing in their homelands. They argued that if they were given a chance to explain things to them, they would change their minds. This was to be done by teams from the parent nations, who would be allowed to talk to each prisoner, in camera. Each prisoner had to undergo the process of 'explanation', but was free to make his choice, regarding repatriation.
When the explanations started, the prisoners refused to come out of their compounds. Thorat and his troops had a difficult time, trying to persuade them to come out. Sometimes, they had to use force, to bring the prisoners to the explanation tent. The prisoners often spat on the members of the explanation team, or beat them up. Sometimes, they even tried to rough up the guards. If force was used by the troops, they were denounced by the Swiss and Swedish members of the NNRC, who considered it a violation of human rights. On the other hand, if the CFI did not do this, the Czech and Polish members accused them of not giving adequate protection to the explanation teams. Ultimately, on the insistence of the Swiss and Polish members, who threatened to with draw if force was not used, the matter was referred to the Government of India. It was decided that no force should be used, and prisoners were to be given explanations only if they wished to. After the ninety day period for explanations had expired, prisoners were handed over by the CFI, to the side which had captured them. The UN Command released its prisoners, in January 1954. KPV-CPV Command initially refused to take back the prisoners captured by them, but eventually did so. There fate was never known.