Hitting back at Singh, who had called demonetisation an "organised loot" and "legalised plunder", Modi said," He (Manmohan) had perfected the art of bathing under a shower with raincoat on" and so there was no blot on him despite all the scams that occurred during his tenure.
This provoked an angry reaction from Congress members who staged a walkout in the midst of the reply by the Prime Minister to a debate on Motion of Thanks to the President's Address in the Rajya Sabha.
Members of Left, Trinamool Congress and JD(U) also staged a walkout after the reply, complaining that they were unhappy with Modi's statement and wanted to ask questions which were disallowed.
Mounting a scathing attack on Modi for his comments, Congress said those were in "extremely poor" taste and "unbecoming of a Prime Minister". The party also demanded an apology from the Prime Minister in the House.
The Congress also dubbed Modi as "arrogant" and charged him with bringing the debate to "the lowest level".
"Within minutes of his speech, he attacked the former Prime Minister in the most unacceptable manner. He said Manmohan Singh occupied various positions and one must learn from him how to take a shower wearing a rain coat.
"It was in extremely poor taste. It is unbecoming of a Prime Minister to use such language against a former PM. We are very very disappointed and angry (with) what the Prime Minister said. We expressed our protest by walking out (from the House)," senior Congress leader P Chidambaram said.
"This is an insult of the House...We have never seen such arrogance. The Prime Minister should think that there is a stature to the post he holds and he does not know what words should be used...We will not tolerate this. We condemn the Prime Minister's remarks. He should apologise to the House for this," he said.
Eearlier, targeting Manmohan Singh, Modi said,"in this country, perhaps there will be hardly anyone from the economic field who has had dominance on the country's financial affairs for half of the country's 70 years of independence. Out of 70 years, for 30-35 years, he has been directly associated with financial decisions.
"So many scams occurred... We politicians have a lot to learn from Dr Sahab. So much happened, there is not a single blot on him. Dr Sahab is the only person who knows the art of bathing in a bathroom with a raincoat on."
As Congress members created uproar and staged a walkout, an angry Modi said, "If you cross the limits of decorum, then you should have courage to listen to the response. We have the capacity to pay in the same coin. We do so within the limits of decorum and boundaries of the Constitution. They (Congress) don't want to accept the defeat in any form. How long will it continue??
He went on to add, "If the person who held such a high post, used the words "loot" and "plunder" in the House, they (Congress) also should have thought 50 times (before using those words)."
Modi also came in for sharp criticism from Congress vice president Rahul Gandhi, who said," When a Prime Minister reduces himself to ridiculing his predecessor-years his senior, he hurts the dignity of the parliament &the nation.
"He demeans his position and himself more than anyone else. Today's events were saddening and frankly, they were shameful," Gandhi tweeted.