The party made debut in the Maharashtra Assembly by winning two seats in the last year's elections.
Jaleel, a former journalist, won from Aurangabad, while Warees Pathan won from Byculla in Mumbai.
The party has appointed Mushtak Khan as observer for Aurangabad corporation election to be held on April 22.
It held a meeting to select candidates for Aurangabad election, where, according to Jaleel, there was a heated argument between him and Khan.
"Khan is the observer for Aurangabad election and I urged him to allow me to concentrate on Bandra East assembly by-poll where Congress has fielded its senior leader Narayan Rane," Jaleel told PTI.
"But the observer refused and asked me to concentrate only on Aurangabad," Jaleel said.
Following this, Jaleel resigned from selection committee.
"I have left the committee and not the party," he said, refuting the possibility of a split in the party.
Some party workers shouted slogans against Khan at the venue of the meeting.
The party has fielded Raja Rehbar Siraj Khan for Bandra East by-election, necessitated by the death of sitting Shiv Sena MLA Bala Sawant.
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