Mobiles available in your price range 13-17k
1) HTC Desire Z - This would be a better fit for your requirement. Cost - 17k. Full Qwerty Keypad, 3.7 inch Super LCD screen, Second Gen Scorpion Processor 800 MHZ (easily overclockable to 1.8 ghz) and adrenos 205 gpu. It has faster and better performance. But check out Igyaan review because they had some problems with signals. But other than that it is good since it is HTC. 5MP camera/720p Video/LED Flash. Already news of Desire Z upgradable to 2.3 official from HTC.
2) Acer Liquid Metal - Cost - 17k. Now this has better hardware than Motorola defy. But from the looks and feel of it I disliked it instantly. While the metal on the back is good. The screen is bad. It has 3.6 inch capacitive screen. Hardware wise it has second gen scorpion processor 800 MHZ (capable of overclocking to 1.8 ghz) and adrenos 205 gpu. This same hardware is found in Desire Z. 5MP camera/720p Video/LED Flash. Do not know if upgradable to 2.3. Currently running 2.2
3) Huawei X5 - Cost - 15k. This also has same processor/hardware/camera/specs as Desire Z minus the qwerty keyboard. 3.7 inch screen. I believe this also comes with 2.2 froyo. But do not know if it is upgradable to 2.3
4) Motorola Defy - Cost - 14K. I am baffled as to why retailers are against motorola. Lots of members here are buying Defy and are happy with it. Given the ruggedness and also being water/dust proof. It will last you longer than any other models you buy in the market. Motorola service is ok and I am surprised as to why they say it is not trusted. Also with custom rom and overclocking you can easily tweak it to suit your need. Already custom modded to run 2.3
5) Spice Mi-410 - Now I was recommending this product before. But the past few days some problems have been propping up. Please check this forum. But for the 13k price and hardware it has. It is absolutely the best VFM. The other models with same hardware costs 25k or above (Arc/Desire HD/Desire S/Incredible S) Currently running 2.2 Froyo, but upgrade to 2.3 will be available from Spice at the end of the month or soon.
We have already discussed about Galaxy S, SL and Nexus S. Please do not choose Galaxy SL as it is not worth to spend 19k for a phone with such inferior hardware. It has same processor and gpu as Defy. While defy processor speed is 800 mhz, galaxy SL is 1 ghz. But that is it.
If you are still hesitant, then just go for Nexus S because of faster updates from google. Also since it has same hardware as Samsung Galaxy S but cheaper in price. Anyways good luck.