Indian energy group Essar said Tuesday it is suing Greenpeace for defamation over a giant banner unfurled on the front of the conglomerate's headquarters that read "We kill forests".

Activists scaled the building in central Mumbai last week and unfurled the banner to protest at the company's mining plans in Madhya Pradesh state, which activists say will damage one of India's oldest forests.

Essar did not specify a figure, but Greenpeace India said the group was seeking five billion rupees (79.6 million dollars) in damages.

"The defendants have made certain imputations as a consequence of which immense damage has been caused to its reputation, goodwill and to brand 'Essar'," the company said in a statement on its website.

"Essar holds the defendants liable for damages and has accordingly sought appropriate redress from both civil and criminal courts."

Greenpeace said the lawsuit, also filed against local activist group Mahan Sangharsh Samiti, was "a bullying tactic that is intended to intimidate us into abandoning the Mahan forests and the 14,000 people who depend on them for livelihood".

"This lawsuit just makes us more determined, because it is proof that we are starting to expose things they don't want the public to know," Greenpeace said on its website.

Essar has been granted a coal block in the Mahan forests in central India, but Greenpeace and other activists say mining there will threaten a fragile ecosystem where indigenous tribespeople live.

According to Essar, the activists last week trespassed on the building to unfurl the banner on the front facade by masquerading as builders and cleaners, before they were arrested by police.

Activists then staged a sit down protest outside the building, one of the biggest in Mumbai.