"I will not deny that Feroze Khan's utterances embarrassed us. But the person to whom Khan spoke showed a lot of dignity and did not react to the drunken gaffe," Bhatt told reporters here Thursday.
At a post-premiere party at Lahore's Royal Palms Wednesday, Khan had gotten into a scuffle with anchor Sakre Aalam and reportedly made controversial comments on Pakistan.
Bhatt, Pehlaj Nihlani and Shatrughan Sinha then apologised on Khan's behalf. The Indian team also included Tourism and Culture Minster Ambika Soni and actress Manisha Koirala.
"I am not defending him, neither am I denying that his utterances contaminated the historical moment.
"If a member of your family misbehaves and embarrasses you, you cannot do anything about it. I wish life were an editing room where one could sit and edit all those embarrassing moments away," Bhatt said.
But the veteran Indian film actor was all praises for Pakistan President Pervez Musharraf when he arrived in Lahore as a part of an Indian delegation of Indian actors.
He said Musharraf was true humanitarian since he recognised the importance of people-to-people contact.
"Hats off to President Musharraf, for recognising the fact that art has no boundaries, faith or face. It is simply 'art' and that it is meant to be shared.
He is truly a great statesman and politician, and a humanitarian because he recognises the importance of people-to-people contact," the Daily Times quoted Khan as saying.
He added: "I feel that new gateways for peace have opened under President Musharraf's leadership and that he is definitely the best leader in Pakistani history."
Feroze Khan expressed interest in the current intercultural exchange of artists and film personalities in both countries.
"As a producer, I truly appreciate the scope that such an exchange can offer for both these countries. If both these great nations can only recognise their similarities and cooperate, there is no reason why our combined economic and cultural strength cannot compete with the best in the world," he said.
Khan further added: "The only border that really exists is the one in our minds. That is the only border which needs to be removed."
"The last time I came to Pakistan was twenty years ago, on a transit flight where we stopped at the Karachi airport for twenty minutes. It was hardly even a real visit. I feel emotionally devastated, in a good way...
The love I have received from people here is rather overwhelming, and it is wonderful to be able to reacquaint myself with old friends," he said.
The veteran film actor praised both the Indian and Pakistan government for trying hard to find an amicable solution to the Kashmir problem.
"It is time to put the past where it belongs, in the past. Pertinent issues like Kashmir need to be handled delicately, but not by evading them and I think that the present governments of both countries are truly dedicated towards finding an amicable solution to this major standstill."
Akbar Khan's "Taj Mahal" is the second Indian film after "Mughal-E-Azam" to be released in Pakistan.