Dharma's total score read 11-under-199 at the end of the penultimate round at the Bombay Presidency Golf Club (BPGC).
Delhi's Ashok Kumar (69-69-62) and Vijay Kumar (70-68-62) of Lucknow shot the week's joint best scores of eight-under 62 to be one stroke adrift of the leader in tied second at 10-under-200.
The week is crucial for both golfers to ensure their cards as Ashok lies 49th in the money list while Vijay is outside the top-60 in 88th place.
Four players, the Chandigarh duo of Ajeetesh Sandhu and Sujjan Singh, Om Prakash Chouhan of Mhow and round two joint leader Mandeo Singh Pathania of Greater Noida were bunched together in tied fifth at eight-under-202. Ajeetesh Sandhu also shot the week's best of 62 courtesy a chip-in eagle, seven birdies and a bogey.
Chandigarh's Abhijit Singh Chadha, the overnight joint leader, slipped to tied 22nd at three-under 207 after his third round of 74.
Dharma (69-67-63), who started the day in tied 11th, scored eight birdies and a solitary bogey.
Dharma collected four more birdies on the front-nine after landing his short-irons within two feet on the fourth, fifth and ninth and within five-feet on the eighth. The Bangalorean's progress slowed down as he missed a short birdie putt on the 10th and then found the trees on the 14th to drop his first shot of the day.
Interestingly, the teenager, who is currently India's top junior golfer, had won a junior event at the same venue the previous week and he gave credit to his friend Rohan Kathuaria for making him play this event.
"The win in the junior event at Tollygunge last week gave me a good feel of the conditions here and helped me raise my game this week. However, I would not have played this event had it not been for my friend and fellow golfer Rohan Kathuria," Kochhar said.
"Rohan almost forced me to enter this event after my win last week. Shubhankar Sharma, who recently moved to Panchkula, also gave me the confidence to play in professional events when I spoke to him back in Chandigarh.
His only previous appearance in a professional event was at the PGTI's Kolkata Classic earlier this year, where he missed the cut.
The bespectacled lad however took Tollygunge Club by storm this time in round three as he delivered six birdies against a lone bogey on the first 12 holes.
Kochhar, a winner of two junior titles this year, finally powered ahead with some outstanding drives on the 14th, 15th and 16th, that led to birdies.
He converted his third 15-footer of the day on the 16th. It was a mere formality from there on as Karandeep led by three strokes with two holes to play. He displayed a cool head to seal it with two pars at the end.
Kochhar, who played 28 holes today due to the weather interruption on day two, rounded off a fairytale week thanks to his all-round performance.
"At the start of the day, I thought a top-5 or even a top-10 finish would be great. It never occurred to me that I would be in a position to win. I did not see the leaderboard till the 14th. That's when I realized I was leading.
"I then drove it really well on the final stretch. There were some nervous moments on the last two holes but I didn't lose focus," Kochhar added.
Kochhar attributed his early initiation into the game at the age of three to his grandfather Dr G S Kochhar.
Gurgaon's Digvijay Singh, the second round leader by two shots, slipped to tied third after a 70 in round three. He shared the third spot with Bengaluru's Khalin Joshi (68) at 10-under-200.
Shankar Das (67-67-69) ended the week as the highest-placed professional from Kolkata. He clinched tied seventh position at seven-under-203.
Final Scores after Round 3 (54 holes):
196: Karandeep Kochhar (66-68-62)
199: Om Prakash Chouhan (68-67-64)
200: Digvijay Singh (63-67-70), Khalin Joshi (67-65-68)
202: Shamim Khan (71-67-64), M Dharma (69-69-64).
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