In 2014, he was accused of plagiarism by the makers of the Telugu film Ala Modalaindi, who claimed that his film Krishna Leela was a copy of their film. However, Ajay Rao denied the allegations and said that his film was an original script.
In 2016, he faced a backlash from some Kannada activists who protested against his film Jai Maruthi 800, which they claimed was a remake of the Telugu film Alludu Seenu. They demanded that the film should be banned or renamed. However, Ajay Rao clarified that his film was not a remake, but a tribute to Lord Hanuman, and that he had taken permission from the original makers.
In 2017, he was involved in a legal dispute with the producer of his film Dhairyam, who alleged that Ajay Rao had not paid him the agreed amount for the film’s distribution rights. The producer filed a complaint with the Karnataka Film Chamber of Commerce, which resulted in a temporary ban on the film’s release. However, the issue was later resolved amicably and the film was released.