Yaatri, arguing with you is futile. Please understand that I agree with you in principle - over-entitledness is not something I support.
The issue here is not about over-entitledness. SpiceJet had a stated policy which it decided to ignore. You can argue semantics about how the policy is worded or whether they mean it in the way OP wanted to use it. I assure you that OP's case is exactly what SG meant when it wrote that policy.
I've been using SG for years when I connect to an international carrier with heavy bags, since IC's excess baggage prices are high... There was never an issue with the interpretation of this policy until this July when I had the bad experience... Other Indian carriers have had the same policy published over the years. SpiceJet was merely a straggler when it comes to discontinuing the policy. But that does not give SG the right to ignore a policy which was in place when OP booked the ticket.
OP can take SG to court and win without an issue - there's no question of who is right and who is wrong. The question is whether dealing with the court system is worth the time and effort and money, and I'm inclined to think that it's not.
A credit card dispute, on the other hand, is free with most credit cards (in the US anyway). Definitely something OP should look at.