Karan had shared a selfie with her on Instagram, terming her "fun" and "fabulous", shortly after he interviewed her at an event in Gurugram last month.
"Interviewing #maanandsheela was an experience! She is fun forthright and fabulous! Dodging every answer in her inimitable fashion! She is controversial without revealing a thing! Now that's an art! She is witty and never at a wits end! Thanks for the help @shakunbatra," he captioned the image.
The story of Ma Sheela gained popularity after the success of the documentary "Wild Wild Country", which charted the growth of Osho's community from India to setting up a cult in Oregon in the US. It highlighted the role Ma Anand Sheela played in the growth of the community, before its downfall.
Karan's friends and colleague from Bollywood like Alia Bhatt, Ananya Panday, Soni Razdan and Vishal Dadlani congratulated him on his meeting and interviewing her.
However, there were netizens who expressed disappointment at Karan's attempt to "glorify" a "criminal and bio-terrorist" with his photograph.
Ma Anand Sheela was arrested in West Germany in 1986, sentenced to 20 years' prison-time, and paroled after 39 months.
A user wrote: "Trust Bollywood to glorify a renegade and a lunatic criminal like Ma Anand Sheela just cause she is fun and fabulous."
Another said: "Wait.. why is everyone saying good things about her? Do you even know who she is? She is a cult member who killed".
A user requested Karan to not "promote evil".
One even said: "2 scandalous people".