The rough video, which features Sunny Deol, Sakshi Tanwar and Ravi Kishan, surfaced online some weeks ago and has drawn the ire of some people in Varanasi where the film is set.
Dwivedi said he watched the pirated footage after he was informed about it by a relative and was pained by the "illegal misguiding trailer on the social-media".
"The way the pirated footage of the film 'Mohalla Assi' is being circulated, it appears to me that it is an attempt to sabotage the film and mar its prospects by vested interest and polluted minds. Whatever is shown in the pirated 'collage of abuses' is to misguide, enrage the audience and create an atmosphere of unrest among its viewers," Dwivedi said in a statement.
"It also seems to me that this is a deliberate attempt by vested interests to malign me and my social and cultural allies. The matter regarding unlawful piracy and uploading movie images on social media is under police investigation and I am looking forward see that this issue is taken it is logical legal end," he said.
The film is based on celebrated work of Sahitya Akademi award winner Kashinath Singh's "Kashi ka Assi", particularly "Pandey Kaun Kumati Tohen Laagi" segment from the book.