Last month, Ms Menon, Rajesh Bajaj of Bhrashtachar Virodhi Gandhigiri Jan Andolan and two others accused the former Maharashtra revenue minister and BJP leader Eknath Khadse of unduly favouring Mr Bhosale's firm in connection with land in Shivajinagar area in Pune.
Ms Menon had alleged in a press conference that the transaction led to "windfall gains" for ABIL, Mr Bhosale's firm, but the firm had called the allegations baseless.
On Thursday, Mr Bhosale filed a defamation suit in the local court against Ms Menon, Mr Bajaj and two other persons - Muzzaffar BS and Deedar Ali Paigambar -- for making baseless allegations and tarnishing his image, reputation and goodwill, said his lawyer Pravin Kulkarni on Friday.
He said a court had rejected Mr Bajaj's application seeking direction to the police to register a case against ABIL.
Mr Bajaj, however, had a police case registered by misleading the Chatushringi police in Pune about the court's order, the lawyer alleged.