The Slumdog Millionaire actress, 10, and her family had to sleep in the open air after their home in India was demolished to make way for a new railway line.
This comes despite the promise of a new luxury apartment paid for by a trust fund set up by the hit film's director Danny Boyle.
Slumdog: Rubina Ali sits amongst the torn down wreckage of her shanty town home in the Garib Nagar - City Of The Poor - slum in Mumbai
A friend witnessed the actress trying to save her home as baton-wielding police kept residents at bay.
Dinesh Dubey said: 'Rubina was pleading with the authorities when they came. She was telling them "This is my house, I was born here".'
Once bitten: The 10-year-old actress stands in front of her demolished home which was levlled for the first time in May this year
Drives by the authorities to level illegal areas like Rubina's are common in Mumbai, where more than half the city’s population of about 18 million live in slums.
Boyle, 53, has bought flats for Rubina and Azharuddin Ismael Shaikh, her ten-year-old co-star, whose shanty home was also destroyed in May.
Slumdog to film star: Rubina Ali at the Oscars with co-stars Azharuddin Mohammed Ismail and Ayush Mahesh Khedekar
According to local media, the Ali family wants an apartment worth 4million rupees (£53,000) instead of the 2.5million rupee home that the British director has bought for them.
The Jai Ho Trust consists of a £450,000 pot of money to provide for Rubina’s and Azharuddin’s education and housing, and was set up by Danny Boyle in April.
Rubina and Azharuddin played the youngest versions of Latika, the film's female lead, and Salim, the brother of the hero Jamaal, in Slumdog, which won eight Oscars earlier this year.
The film is estimated to have grossed almost £240million worldwide and launched British actor Dev Patel and his girlfriend Frieda Pinto to stardom.
Concerns for Rubina’s welfare grew earlier this year when her father was reported to have offered to sell her for £200,000.
The father denied the allegation and police said that they found no evidence against him.
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