Chadha, thus, set up a best-of-seven frames title clash with another surprise finalist Zubin Leninwala of Indian Snooker Academy, who upset second seed Pranit Ramchandani by the same margin.
Leninwala rallied to a 40-6 37-57 58-59 66-27 10-48 64-58 56-28 win after trailing 2-3 against his rival from Tamil Nadu.
The final is scheduled tomorrow.
Chadha endured a roller coaster ride in an eventful best-of-seven frames semi-final before overcoming the Asian 6-Red bronze medallist 70-23 70-37 17-55 30-52 0-89 57-21 63-60 in an exciting all-Khar Gymkhana contest.
The break was marked by impressive potting and enhanced Rawat's chances of a place in the championship round before Chadha forced the decider by winning the crucial sixth frame.
Rawat lived up to his reputation by surging to a 60-35 lead in the decider, needing only a colour to take the match away. But poor safety play allowed Chadha to claw his way back into contention.