THE ongoing boardroom battle in Swaraj Mazda is all set to escalate. Auto industry sources said Swaraj Mazda has received notices from the Mahindra & Mahindra (M&M)-controlled Punjab Tractors (PTL) over the use of the Swaraj brand name in its products as well as the proposed rights issue. Private equity player Actis too has joined PTL to protest the rights issue. Sources also said Swaraj Mazda was issued a notice before the board meeting over the rights issue, asking it not to proceed till the pending cases are sorted out. “Unless both of these issues are clarified, it could lead to further litigation,” said an industry source. M&M claimed that PTL has contractual rights over the Swaraj brand name, which was granted to sister company Swaraj Mazda more than 20 years ago. When contacted on the probability of litigation over the brand name’s use in Swaraj Mazda’s products, M&M executive director Bharat Doshi told ET: “PTL has certain contractual and legal rights and Swaraj Mazda has been put on notice to desist using that name on its products.” As for further litigation over the rights issue, he said: “The details (of the rights issue) have not yet come. However, PTL will take steps to protect against stake dilution.” Swaraj Mazda is already locked in a litigation with PTL over the latter’s right to appoint directors as well as the chairman and the vice-chairman in the company. The rights go back to the time when PTL had a 29% stake in Swaraj, which continued after the ‘inter se promoter transfer’ of 15% to Sumitomo. Till PTL was controlled by Yash Mahajan, there was no problem. But since PTL’s control shifting to Actis and the Burman family (and later to M&M after its acquisition) and Sumitomo’s stake in Swaraj Mazda rising to 40%, the two companies have been at loggerheads. And there are no indications that those won’t continue. “The litigation which was commenced by PTL long before the acquisition by M&M, will continue as PTL’s contractual and legal rights are involved,” said Mr Doshi. At present, Sumitomo owns 40% of Swaraj Mazda, followed by Actis with 17% and PTL with 14%. But sources said M&M may not be interested in hiking its Swaraj Mazda stake due to conflicting partnership obligations. Swaraj Mazda has a technical tie-up with Isuzu while M&M has an alliance with ITL, part of American truck major Navistar, for its commercial vehicles.