The action came after AAP legislators demanded action against the Viswas Nagar BJP MLA, saying his remark was an "insult of the House".
Sharma was speaking on water shortage in his constituency during which he also criticised some Delhi government officers.
When Amanatullah Khan opposed this, Sharma used the objectionable word against him.
Later, the Speaker expunged the word used by Sharma from House proceedings.
When the Speaker referred the matter to the Privileges Committee, BJP MLA Jagdish Pradhan walked out of the House to register his protest.
Kejriwal took to twitter to accuse the BJP of dividing India.
"Why did Narendra Modi go to Pakistan to meet Nawaz Sharif; Why did he call ISI for investigation in Pathankot? What is the relationship of BJP and Pakistanis?" Kejriwal said.
He said those in power at Centre and in opposition in Delhi have a mentality of "dividing" the country.
The deputy chief minister said this country belonged to all and not just a particular religion, adding this is not just the question of an MLA and that this could not be tolerated in the House.
Following the ruckus over the issue, Speaker adjourned the House for 30 minutes.
While proposing to refer the matter of Sharma to the Committee, Jha alleged that country cannot be "divided" in the name of religion.
Jha said he wanted to know how Sharma could use foul language against officers working with the Delhi government.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)