Farhan Akhtar, 40, who hosted the ceremony with Shahid Kapoor, bagged the best actor trophy for his powerful portrayal of Singh in the sports drama.
Deepika Padukone, 28, nominated in the best actress category for three of her films, won the award for 'Chennai Express'.
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Director Mehra handed him the award, saying, "I don't deserve this."
Milkha, who was actively involved during the filming of the biopic, got emotional and said, "I am thankful to IIFA for bringing me here and giving me respect. I have cried three-four times in my life... Whenever I see the film I cry. When I was sitting here now I was in tears seeing the love and recognition the film got."
'Bhaag Milkha Bhaag' also won in the best story category along with best supporting actress for Divya Dutta, who played the role of Milkha's sister.
Deepika's 'Ram-Leela' co-star Ranveer Singh handed her the best actress award for her performance in Rohit Shetty's blockbuster.
"2013 was a lucky year for me and I think I have proved 13 is not an unlucky number. I thank my parents as they allowed me to pursue my dream. I left home with one suitcase when I was 18-year-old. I think I have a long way to go but I do feel I am on the right path," Deepika said after receiving the award.
Deepika was also honoured with the best entertainer of the year award, which was handed to her by Oscar-winning actor Kevin Spacey.
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