The Hyderabad High Court directed the Telangana government and Kiran Infertility Centre on Thursday, not to hand over infants born to surrogate mothers at the clinic, until further notice.
A police raid last month had discovered 48 surrogate mothers, who were kept confined in the hospital.
Police said that the infertility centre had hired brokers, and was collecting Rs 15 to Rs 30 lakh from their clients, however only Rs 3 lakh would be paid to the 48 surrogate mothers.
Despite this, the surrogate mothers claimed to be there of their own free will, with many of them, in dire need of the money.
According to reports, the court directed the authorities to take care of new born babies for now, and said that it will decide the issue of custody of the children later.
On the claim by some advocates representing the clinic, that authorities had sealed the ultra sonograph machines at the centre, the state's counsel told the court that three such machines were sealed, while one was kept open, to regularly check the pregnant women, the Times of India reported.
Last month, as the women were unwilling to move out of the fertility centre, the HC bench directed the state to examine their health and provide the required care to the women.
The women were kept in the second and third floor of the building where they were being provided with food, medicine, and Rs 10,000 as subsistence allowance by the infertility centre.
The Telangana State Women's Commission had also shot off letters to the District Medical and Health Officer (DMHO) and the police department when the incident came to light.
â€śIs there a plan with the police department or women and child welfare? Who will bear the maintenance of the surrogate mothers pre and post-delivery and the maintenance of children?â€ť the commission had asked.