The guardianship of the child will be decided by the court alone.

You can file a petition before the jurisdictional court seeking to appoint guardian to the minor child for the reasons your rely upon 

you can also ask the court to direct the respondents to deposit the money belonging to the child as the legal heir to her mother and the properties left behind by her parents to be transferred to her name and appoint the court appointed guardian as nominee to take care of the assets till the child becomes major by age.

If there is no compromise settlement to this issue then instead of unnecessarily dragging on the issue better approach court to get proper relief as per law.

1. After the death of the mother the money belongs to the child only and if this transfer of money to someone else's name is s=established in court the transferee can be criminally prosecuted.

2. he court at the same time can direct the money to be invested in the name of the child as well.

3. So a suit for guardianship as well ad demand for money can be filed in court .

Make application to court for being appointed as guardian of child 

2) also seek orders to direct maternal grand parents to hand over funds illegally transferred from mother account 

There is no easy and speedy way you have to file a proper suit and recover it 

That is not ground to deny child guardianship 

welfare of child is paramount consideration 

draw attention of court to fraudulent conduct of maternal family 

local lawyer can guide you as to time taken for the process 

The court decisions on this subject cannot be predicted.

The court will thoroughly weigh all the pros and cons and the merits especially when the child's interest is involved because that is paramount.

If the child's paternal side are filing the case then they have to implead the maternal side as respondent, hence you will be getting sufficient opportunity to challenge and get their case dismissed

It will not happen as above in legal manner 

I understand this is a sensitive situation involving the well-being of a young orphan and a financial dispute. Here's some guidance based on Islamic principles and Indian legal aspects:

Custody and Guardianship (Hiranat and ولاية Wilaayah):

Paternal Preference: Under Islamic law, the paternal uncle (Khal) usually has the preferential right to custody (Hiranat) and guardianship (Wilaayah) of the orphaned child, especially a girl, unless there are compelling reasons to the contrary.

Court's Decision: Ultimately, the court will decide guardianship based on the child's best interests. Both sides can present their case regarding their suitability to raise the child.

Financial Matters (Mal):

Child's Money: The money from the father's LIC policy belongs to the orphaned child. It should be used for her benefit, including education, healthcare, and future needs.

Dispute Resolution:

Sharia Council: Consider approaching a Sharia Council affiliated with a local mosque for mediation. They can help resolve the financial dispute based on Islamic inheritance principles.Legal Action: If mediation fails, a lawsuit can be filed in the civil court to recover the funds. This can be a lengthy process.

Minimal Resistance Path:

Negotiation and Agreement: Open communication and a written agreement outlining how the money will be managed for the child's benefit could be a solution. A neutral third party, perhaps a respected member of the community, could mediate the agreement.

Joint Account: Consider a joint bank account with representatives from both sides to manage the money for the child's well-being. This can build trust and ensure transparency.

Here are some resources that might be helpful:

Sharia Councils: Local mosques might have affiliated Sharia councils that offer mediation services.Lawyers: Look for lawyers with expertise in Islamic law and inheritance in West Bengal.