Unseeded Mhatre, who is rated nearly 450 points below Panesar, came out clearly better in the the Sicialian Defense opening and managed to win the advantage of a pawn in the middle game.
However, he was not able to convert the material advantage into a win and had to be content with a draw after a marathon 100 moves at the Don Bosco High School, Borivali.
Top seed IM Vikramditya Kulkarni, FM Avinash Awate, Amardeep Bartakke, Ketan Boricha, Chirag Satkar and Shubham Kumthekar scored victories over their respective rivals to lead this 312-player field with a full score of 3 points each.
Seven more rounds remain to be played in this championship.
Key Results (Round 3): IM Vikramaditya Kulkarni (3) bt Dayanand Naik (2), FM Avinash Awate (3) bt Jeet Shah (2), Ruhaan Mahindru (2) lost to Amardeep Bartakke (3), Ketan Boricha (3) bt Akash Mahajan (2), Rahul Pawar (2) lost to Chirag Satkar (3), Arun Tripathi (2) lost to Shubham Kumthekar (3), Rajababu Gajengi (3) beat Zaheer Khan (2), Rahat Mhatre (2.5) drew with Vedant Panesar (2.5), Sudhir Gawai (2) lost to Ketan Patil (3), Krishna Malay (2) lost to Abhijit Joglekar (3).