A local judge has allowed the case to move forward.
Mahindra & Mahindra had moved to dismiss the lawsuit alleging fraud, misrepresentation and conspiracy by US auto dealers last June.
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M&M is fighting a legal battle with its American dealers over the launch of its first ever passenger vehicle product in the US market.
Last year, local dealers filed a suit against M&M alleging that the company misled them into believing that it was planning to roll out a new truck brand for the US market.