At the time of incident, Bhushan was campaigning for the AAP candidate Alok Agarwal from Khandwa constituency.
According to TV reports, at least 25 people barged into Bhushan's news conference venue and removed his AAP cap while raising anti-AAP slogans.
While talking to reporters and blaming the ruling-BJP government in the state, Bhushan said, "such an act shows their culture."
According to PTI, a member of a right-wing organisation created a ruckus at a press conference of Prashant Bhushan in protest against his controversial statement on the Kashmir issue.
Member of Devpath', an outfit headed by local BJP leader Mukeshsingh Rajawat, abused Bhushan at the press conference, and snatched off the AAP cap the latter was wearing, while shouting "Kashmir belongs to us" and "Bhushan is a Pakistani agent".
Rajawat and some 50 of his supporters subsequently arrived at the spot and shouted slogans against Bhushan and waved black flags.
AAP candidate from Indore Anil Trivedi escorted Bhushan out of the hotel and took him away.
The man who started the ruckus ran off, and was yet to be identified.
Nobody has been arrested so far. AAP workers also staged a sit-in to protest the incident.
Before leaving, Bhushan told reporters that "BJP has kept these goons for carrying out this kind of activities. It shows its fear and desperation, because for the first time it has been challenged by a group of honest persons".
He also claimed that his statement on Kashmir was presented in a wrong manner. On one hand BJP leaders said that Kashmir is an inseparable part of India but when someone talked about Kashmiris, they termed him as Pakistani agent, he said.
This is not the first time that Prashant Bhushan has been publicly heckled.
In October 2011, Bhushan was badly beaten up in the Supreme Court chamber by Bhagat Singh Kranti Sena activists over his stance on Kashmir.