Germany apologizes for luxury Gandhi pen
The firm told the court in Kerala state it would suspend sales of the $24,000 (£16,000) pen until a ruling on whether it could continue to sell it in India.
Opponents of the pricey pen argue that it is an inappropriate way of honouring a man who was known for his austerity.
The gold and silver limited edition pen includes an engraving of Gandhi.
Mahatma Gandhi is seen as the father of Indian independence and revered as a global spiritual leader.
Golden thread
The Centre for Consumer Education in Kerala filed a lawsuit last autumn to try to stop the Montblanc pen being distributed.
It argues that the pen is in breach of a 1950 Indian law prohibiting the improper use of emblems and names.
While the court deliberates, the company has promised to put sales on hold.
"We have agreed to stop selling the pen until the court decides on the matter," Pankaj Shah, director of International Trading Private Limited, which distributes Montblanc pens in India, told the BBC.
Just 241 of the handmade pens will be sold, reflecting the number of miles Gandhi walked in his famous march against salt taxes in 1930.
Each pen comes with an eight-metre golden thread that can be wound around the pen, representing the spindle and cotton Gandhi used to weave simple cloth.
Mr Shah said 42 of the 70 pens "allotted" for India had already been sold since they were launched in early October.
Gandhi's great-grandson Tushar Gandhi has endorsed the idea. His charitable foundation has already received a donation of $145,000 from Montblanc and will receive between $200 and $1,000 for each pen sold.
For those who find the pen a little out of their price range, there is a more affordable version - there are 3,000 roller ball and fountain pens on sale for about $3,000 each.