Comparing the Lankan star to a 'shot putter', Bedi had recently said that Muralitharan was taking advantage of his physical deformity and that the International Cricket Council had "created a monster" by allowing him to continue to bowl.
Muralitharan's manager Kushal Gunasekara had sent a letter of demand to Bedi.
Sources said Murali was hurt over Bedi's 'disrespectful' remarks which is nothing short of 'character assassination'. Colombo's leading law firm Sudath Perera Associates, along with leading lawyers Romesh De Silva and Dinal Phillips, have been reportedly hired to handle the case.
Sri Lanka Cricket Board had also come out in support of Muralitharan and said Bedi's remarks were made with an intention to "harm the bowler's reputation and achievements."