Congress MLA Vijay Wadettiwar cited media reports to make the allegation.
However, Speaker Haribhau Bagade said a member of the House should make a statement based on facts and not on basis of what has appeared in the media.
"Such remarks will be expunged from House proceedings," he said.
While Munde dismissed allegations levelled against her, Chief Minister Devendra Fadnavis threatened warned Wadettiwar of moving breach of privilege motion against him for making baseless allegations and maligning the MLA's image.
While CM was speaking, BJP and Shiv Sena legislators stood up and sought Wadettiwar's apology.
BJP and Sena members rushed to the minister's defence, while opposition Congress-NCP raised slogans against her.
The House was adjourned four times amid uproar.
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