The Maharashtra government has banned the film, Deshdrohi, for two months in the state, fearing a breakdown in law and order.
It is learnt that the film producer will move the court against the ban. The movie is slated to release on November 14.
The move came after the Mumbai police suggested that the film should not be allowed to screen as it could promote enmity and vitiate the already-volatile atmosphere.
The controversial film, starring actor Kamaal Khan, deals about the injustice meted out to North Indians in Mumbai.
In the promotions of the film, the lead actor, played by Kamaal, is often taunted as 'bhaiyya' and was seen beaten up on the city streets.
The protagonist in the film, it is learnt, is told to go back to his native place as people from North India are taking over the jobs of Marathis.
If the film is released now, the Mumbai police feared, there would be a backlash from the Raj Thackeray-led Maharashtra Navnirma Sena.
Raj Thackeray has started a campaign against North Indians in the state, saying that they should go back to their native places as they are snatching the jobs from Marathis.
Raj was arrested last month for "spreading enmity within the country", creating a furore in Mumbai and other parts of the state.
Kamaal Khan, who is also the producer of the film, could not be immediately contacted, but some television reports said that he would move court against the state decision.
He stressed that he could not see the logic behind the police objecting to the film's release, especially after the Censor board cleared the film.
Kamaal has made Bhojpuri films and this is his first venture in Hindi films. He owns a garment company, Kamaal Fashions, in New Delhi and Noida.
PTI adds:
Top police officers had watched 'Deshdrohi' on November 8. They had asked Kamaal Khan for a separate screening before the film's release in view of the MNS' anti-North Indian campaign.
Joint Commissioner of Police (Law & Order) K L Prasad, Additional Director Generals D Shivanandan, Ahmed Javed were among the top police officers who watched the film.
