"Really shocked and dissapointed...The Lunchbox had every factor working in its favour. We may have just lost our golden chance... SAD," Karan posted on Twitter.
His tweet came in soon after it was announced Saturday evening that National Award winning Gujarati film The Good Road has been shortlisted as India's entry for the best foreign film category at the Academy Awards in 2014.
The Lunchbox is a simple understated love story about two strangers who exchange notes about life via a lunchbox. The movie was one of the strongest contenders, admitted filmmaker Goutam Ghose, who chaired the 16-member committee formed by the Film Federation of India to choose an appropriate movie.
"It was a unanimous decision to go with The Good Road," he said.
Earlier Saturday, acclaimed writer-lyricist Javed Akhtar had shared on Twitter that The Lunchbox is "one of the finest films Indian has ever produced".
"If sent, undoubtedly it will bring an Oscar for the country," he had posted.
The film's producer Anurag Kashyap has also expressed disappointment with the decision to oust the movie out of the Oscar race.
Starring Irrfan, Nawazuddin Siddiqui and Nimrat Kaur, the film is directed by debutant Ritesh Batra. It released on Friday.