Her lawyer Datuk Sankara Nair said, following the letter of demand, he advised her that they had a case for a counter suit.
"I have responded by letter that we are suing you for RM5mil for inflicting intentional emotional distress.
"I have issued a letter to their lawyer on this," he told reporters at the Sungai Buloh police headquarters on Friday (Aug 6).
Ain Husniza was called to the police headquarters on Friday evening to have her statement taken over investigation for intentional insult.
Sankara said he was told that police were investigating the case under Section 504 of the Penal Code for intentional insult with intent to provoke a breach of the peace.
"This is with regards to a police report which was lodged over three months ago.
"I will not divulge the name of the person who lodged the report against her but I will be discussing with my client about lodging a counter report for insulting her modesty," he added.
It was reported that Ain Husniza had received a letter of demand seeking damages of RM1mil for alleged defamatory remarks she made.
The 17-year-old student wrote about this in an Instagram post on Wednesday (Aug 4).
According to the letter, Ain Husniza said that she had seven days to fulfil these demands, one of which was to pay RM1mil for punitive damages.
However, she did not elaborate what the purported "defamatory statements" were.
Ain Husniza made headlines earlier this year for calling out her physical education teacher's rape jokes made in class.
In a Facebook post, her father Saiful Nizam Abdul Wahab said that the letter, which was delivered at 2pm, was for Ain Husniza, himself and his wife.
"There are five demands and one of them is to pay RM1mil in damages. We received the letter from the law firm of Rasshidi Ema & Yung," he said.
Saiful Nizam also noted that the letter came from the physical education teacher at the school his daughter previously studied.