Speaking about Muslims and their evolution in India over centuries, Jung said the historic institution at Deoband was once a centre of progressive thought that produced students who joined India's freedom movement.
However, he said, over the years the seminary had failed to adapt to modern times and stands pale in comparison to what it once stood for.
While tracking the history of Muslims in India in his Founder's Day lecture, Jung said both Darul Uloom Deoband and Darul Uloom Nadwa of Lucknow were institutions that were symbols of freedom and resistance to the British.
"Unfortunately, the seminary today is a shadow of its great self, where students are provided Islamic education but little of modern education, with the result that it makes no contribution to the job sector of India," he said.
Making a strong pitch for introduction of modern education at the seminaries, he said this would provide their students a much-needed progressive thought.
"I wish Deoband and Nadwa would modernise and take a lead in guiding the present generation," he said.
Founded in 1866 by prominent Islamic scholars led by Maulana Muhammad Qasim, the seminary in Deoband is looked up to by Muslims not only in India but also in South Asia as a respected centre of Islamic learning.
Jung termed the Liberation War of Bangladesh a watershed year for Indian Muslims as it shattered the two-nation theory that was the bedrock of Pakistan's establishment.
He said while for at least two decades after the Partition, Muslims in India lived under its shadow, they started breaking free from history only in the 80s and 90s.
"Unfortunately, the same period saw the rise of Hindu communalism," he said while referring to L K Advani's Rath Yatra and the demolition of Babri Masjid in 1992.
"Today, we in India understand that there is Muslim terrorism and there is non-Muslim terrorism and that there is need to and ensure greater involvement of Muslims in the mainstream," he said.
Veteran journalist and writer Kuldip Nayar said he strongly believed that communal harmony in India depends on New Delhi's friendly relations with Islamabad.