Tearing at each other's hair and slapping each other across the face, they were captured on camera fighting in the middle of Mumbai's Garib Nagar slums as neighbours watched.
The battle began after claims Rubina's father Rafiq Qureshi tried to sell his nine-year-old daughter.
The furious father - who was arrested and questioned by police before being released - insisted he had been set up.
Rubina, who shot to fame in the Oscar-winning movie, was reportedly abandoned by her mother Kushi Monis Devade as a baby and raised by her father and stepmother Munni Qureshi in the Indian slum. Holding her rival by the scruff of the neck and repeatedly slapping her, Rubina's mother Kushi screamed: "You treacherous bitch. Give my daughter back."
She accused Munni of using black magic to control Rubina.
Kushi said: "My husband must have hidden Rubina. I am sure that they want to sell my daughter.
"They want to bank on her stardom and that's why they wanted her custody."
As neighbours rushed to break up the catfight, an outnumbered Kushi grabbed a wooden stick and again attacked her rival.
With tears rolling down her face, Rubina's stepmother said: "Kushi has been after Rubina since the time she went to the Oscars. For seven years before that, she didn't care.
"Why would we sell Rubina? She is her father's favourite. I love Kushi's children more than she would have loved them."
After hearing of the fight, dad Rafiq rushed back to the slums.
He said: "As far as Kushi is concerned, she left Rubina when she was two years old. Why should we give her custody now? The children are happy with us."
Rafiq had earlier been arrested after a complaint from Kushi.
After his release he denied trying to sell her, saying he was set up by British tabloid News of the World.
"No one can buy my daughter - no matter how much money they offer," he said.
"If someone is the poorest of the poor, or even mentally unfit, he won't sell his daughter. And Rubina has made us proud. She has even been to the Oscars.
"We are deeply hurt. Those people who did the sting operation on us played with our feelings."
Rafiq claimed the newspaper's "fake sheikh" had showered them with gifts. The next day, in a hotel, the offer to buy Rubina was made, it was reported.
Rafiq claimed that he had turned down the offer, saying his daughter was happy with the family. It was said that he had demanded 20,000 pounds before he retracted for reasons not clear.
Freelance journalist and family friend Dinesh Dubey also asserted that Rafiq did not really put up his daughter for adoption, though he felt sympathetic when told that the sheikh was childless.
The boy star of the film, Azharuddin Mohammed Ismail, was earlier slapped by his father Mohammed Ismail when he pleaded tired as the newshounds queued up for interview.
Tired after a long flight, the 10-year-old Azhar wanted to go to sleep and refused to come out to oblige the media. An infuriated father slapped him.
The 'Jai Ho' trust by the 'Slumdog Millionaire' filmmakers has hired a social worker to ensure the welfare of Rubina Ali Qureshi.
"Danny (Boyle, the director) and I remain committed to working the trust and the family to secure Rubina's long-term best interests," Slumdog producer Christian Colson told Us magazine in a statement on Tuesday.
"The trust will support Rubina, her parents and responsible authorities to ensure that the rights and best interests of Rubina are protected," said Noshir H Dadrawala, one of the 'Jai Ho' trustees.