"I generally tell people 'ghee piyo'. But if Bhagwant Mann were to tell people, he will ask them to drink something else," Modi said in the Lok Sabha.
Mann has been accused of coming to Parliament drunk and also at a rally.
Mann, who has often mocked Modi at public rallies with his political satires, condemned the Prime Minister's remarks of "baseless allegations against me".
"Today's speech in Parliament showed his (Modi's) fear of elections," he said.
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The AAP gave Modi his first defeat in electoral politics post-2014 general elections by sweeping the Delhi assembly in February 2014.
The AAP, a new entrant in the Indian politics, has also emerged as a strong force in Punjab and Goa where voting to elect new assemblies was held on February 8. The Bharatiya Janata Party is currently ruling both the states.