Eight members of the Pushtimarg sect have filed a petition against the release of the film.
The Gujarat High Court on Tuesday extended the interim stay by a day on 'Maharaj', the debut film of Bollywood star Aamir Khan's son, Junaid, which was slated for release on Netflix last week.
A single judge bench of Justice Sangeeta Vishen heard the arguments from respondents, Netflix and Yash Raj Films, and the petitioners and posted the matter for further hearing on Wednesday.
The court said that the interim stay on the release of the movie will continue till Wednesday.
Eight members of the Pushtimarg sect have filed a petition against the release after they came across articles about the film, based on a libel case of 1862 heard and decided by British judges.
The petitioners have pointed out that the British-era court, which had decided the libel case, "castigates the Hindu religion and makes seriously blasphemous comments against Lord Krishna as well as the devotional songs and hymns".
Netflix and production company Yash Raj Films argued for the court to vacate the interim order staying the release of the film.
Appearing for Netflix, senior Supreme Court lawyer Mukul Rohatgi argued that the petitioner's prayers citing the government's inaction in failing to block the film in less than 24 hours was "absolutely absurd".
He further said the petitioners' second prayer to set aside the film's censorship certificate, which is more than a year old, is misconceived, as such a certification is not required for a movie's release on OTT.
The cause of action of the petition is "completely contrived and artificial", he said.
Mr Rohatgi said one of the petitioners, a "prominent businessman of Ahmedabad", did not take any steps either against the book on which the film was based or material on the subject available on the internet.
"It is not a small issue for somebody to make a film, produce it or put it on a platform. A lot of money and effort goes into it. ...We have already lost our debut on Friday. No advanced copy was served," he submitted.
The film is based on legal history, which cannot be eradicated, he added.
The 1862 libel case was centred on a clash between a Vaishnavite religious leader and social reformer, Karsandas Mulji, who, in an article in a Gujarati weekly, had alleged that the religious leader had sexual liaisons with his female devotees.
The counsel for Yash Raj Films argued that the only part of the libel case between the Maharaj and the journalist mentioned in the movie is its dismissal.
No other part of the judgment, which the petitioners have objected to, is mentioned in the movie, he said.
The petitioners have claimed that their religious sentiments would be "seriously hurt" if the movie is permitted to be released, and it is likely to affect public order and incite violence against followers of the sect.
Earlier, the petitioners had approached the Ministry of Information and Broadcasting, requesting to take immediate measures to block the film's release. However, there was no response or action from the ministry, it was stated.
Release of the movie is likely to incite hatred and violence against the Pushtimarg sect, which would be in breach of the code of ethics under the Information Technology Rules, and the self-regulation code of the Over the Top Technology (OTT), they said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)