The decision was taken by UB Group "in the interest of the game of cricket" and with the fear that the advertisement could be misused by groups to carry on with their own interest.
"This gesture (to replace the ad) of Dr Mallya is based on the larger national cricketing interests, particularly at time when the Indian Team is engaged in a crucial cricket test series in the United Kingdom," said a statement from the group.
"Despite clear-cut legal opinion and the view of the management that there is no maintainable case, and further keeping in mind that the commercial can be used by vested interests to further their own agenda, in the interest of the game of cricket, Dr Mallya has graciously chosen to replace the current commercial.
"The UB Group and Dr Vijay Mallya are very closely involved with and have a significant stake in cricket and would never disparage any cricketer.
Clearly, the letter received by us has been instigated by vested interests with mischievous intent," the statement said.
Vijay Mallya, through his lawyer responded to the notice that was sent by Avtar Kaur, Harbhajan Singh's mother.
The UB Group was sent a legal notice by Harbhajan's mother who said that these kind of advertisements caused clash and dissension in the team.
Dhoni in a McDowell No 1 Platinum advertisement makes fun of Harbhajan who had featured in an advertisement for Royal Stag. Interestingly both Royal Stag and McDowell's No 1 are competing brands in the market.