Chauhan, best known for playing Yudhisthira on TV epic "Mahabharata", took over as the chairman of the Pune-based institute's governing council last month.
"Don't fight for it, don't force yourself into the post... I am not doubting anybody's capabilities. You cannot impose yourself. A chief command demands respect and I feel bad for him.I think he should step down," Rishi told reporters here.
"He may be the best man but if the students are not able to look up to him then he should voluntarily quit. They need someone to look up to and be inspired from and this post requires someone who has knowledge about production, direction, cinematography and fine nuances of filmmaking," he said.
But the actor called upon the agitating students not to "skip classes".
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"You must attend classes, the chairman has got nothing to do with it," he added.
"If that was the case then there are other people like Hema (Malini), Shatrughan Sinha and Paresh Rawal who could have been chosen," he said.
Earlier, Rishi's son Ranbir Kapoor came out in support of the agitating students.
"I don't think what the students are asking for is illogical, all they are asking for is to give them a fair chance a fair opportunity, correct faculty, correct syllabus. I really do pray that an institute that we all are so proud of and seen such great personalties emerge from... Shouldn't be a disappointment for student and future students," Ranbir said.