The fine-print is always a bit tricky--in any situation.
Usually--to the extent I know about education situations--the decision to withdraw a student from a school HAS to be communicated to the school AT THE END of the EARLIER Academic year--NOT @ the BEGINNING of the current academic year.
Suggest discuss with your lawyer on the options available to you.
But since this involves the academics of a student--moreover, like you say, a destitute child--suggest pay-off the 3 months UNDER PROTEST/DURESS & move the child First to another school so that his/her education doesn't get effected in this situation.
Pl check with your lawyer for the exact wordings you need to use while making such payments--there are legal ways of handling such situations, EVEN WHILE keeping your options OPEN to go legal later.
All the Best.
29th August 2013 From India, Hyderabad