The California-based law firm, Aiman-Smith & Marcy, said that iGate's head of investor relations Araceli Roiz was pregnant with Murthy's child.
Murthy told the iGate board of his relationship with Roiz only after she informed him that she will be taking legal action against him, Roiz's legal firm Aiman-Smith & Marcy said in a statement.
iGate had earlier this week terminated Murthy's contract for not reporting a relationship with Roiz.
Murthy, one of the industry's best-known executives, was forced to quit India's second-biggest software services exporter Infosys in 2002, following a sexual harassment lawsuit, which was settled out of court.
The law firm, which had represented Reka Maximovitch and Jennifer Griffith in the previous sex harassment lawsuits against Murthy, said Roiz remains an employee of iGate and is on medical leave at present.
"When he discovered this (that Roiz was pregnant), Murthy pressured Ms Roiz to have an abortion. When she refused, he told her to leave the company, quietly, to protect his position as CEO," it said in the statement.
Murthy, who had after his sacking stated that he was in relationship with Roiz for "few months" and the sexual harassment case against him was an extortion attempt, could not be immediately reached for comments.
The law firm claimed Murthy began pursuing Roiz shortly after she joined iGate in May 2010 and insinuated himself into her personal life using the pretext of business necessity.
"On behalf of Roiz, we are contemplating next steps, which will certainly include court action against Murthy and iGate," it said adding the Fremont, California-based company was liable for the conduct of its CEO.
While sacking Murthy, iGate had said that an outside probe, which is continuing, had not found any violation of the company's harassment policy.
"We do not believe a full, impartial, investigation can possibly result in this conclusion, but we note that, according to iGate, its investigation is continuing. We hope that iGate will take appropriate responsibility in this matter and that it can be concluded on that basis," the law firm said.
On Murthy's claims that Roiz was engaging in "extortion" by bringing this case against him, the law firm said "Murthy's comments are defamatory and a despicable attempt to 'blame the victim', who only wants to somehow continue her career and support her child."
"Mr Murthy has, astonishingly, attempted to gain sympathy based on his own prior bad actions. Ms Roiz selected the law firm, Aiman-Smith & Marcy, based upon the firm's excellent reputation as vigorous advocates for victims of employment discrimination and its prior success in getting compensation for some of Mr Murthy's previous victims," the law firm said.
The law firm said when Roiz refused to have an abortion, Murthy attempted to get her to leave the company and keep their relationship a secret.
"It was not until after Ms Roiz refused to do so and informed him that she would be seeking legal representation and her lawyers contacted Mr Murthy's counsel that he reluctantly informed the Board of the relationship, just before the Board would have learned on its own from other sources," it claimed.
Although, Roiz's nominal supervisor was iGate s CFO, Sujit Sircar, however, as Sircar was based in India, Murthy was her day to day supervisor.
She worked in Investor Relations, the firm said. Roiz joined iGate in May 2010. "In his role as Ms Roiz's supervisor, Mr Murthy, as he had with his previous victims, insinuated himself into Ms Roiz's personal life using the pretext of business necessity.
In this way, Mr. Murthy was able to induce Ms Roiz into behaviour and action that she would have found unthinkable at the beginning of her employment," the law firm said.
"The CEO of any company, as Murthy was here, has tremendous economic and personal power over his subordinates, it said, adding
"Thus, Ms Roiz was dependent on her continued employment for her basic living expenses and, further, Murthy conditioned her further employment and career advancement opportunities on her entering into a relationship with him which, eventually and reluctantly, she did."
"When she tried to extricate herself from the relationship, he reduced her responsibilities, threatened her continued employment, and pressured her to continue the relationship, it claimed.
"As a result of Mr. Murthy s influence over Ms Roiz, she continued the relationship with him and ultimately, Ms Roiz became pregnant with Mr. Murthy's child. When he discovered this, Mr. Murthy pressured Ms Roiz to have an abortion. When she refused, he told her to leave the company, quietly, to protect his position as CEO," it claimed.
Photos: Amruta Fadnavis at a fashion and lifestyle exhibition
Photos: Sushmita Sen stuns in a black dress with thigh-high slit
Photos: Bhumi Pednekar, Saiyami Kher at a film screening in Mumbai
Dreaded dons! Meet Bollywood's gangster brigade
Photos: The story of Dawood Ibrahim's sister Haseena Parkar