Parashar, who appeared in last year's commercially underperforming Dunno Y... Na Jaane Kyun, alledges that the filmmaker coerced him into a sexual encounter, after agreeing to meet the actor to discuss potential film roles.
Onir, who has won acclaim for his socially relevant work in projects such as My Brother... Nikhil, Sorry Bhai and Bas Ek Pal, denied the assault charges, speaking to IBNS London correspondent.
Rejecting Parashar's claims, the filmmaker said that the actor had stayed the night at his Versova residence by mutual consent.
Onir commented: "This has been a nightmare. For me, the only thing that I want to add, is that my orientation is not my definition, nor am I ashamed of it. But I cannot let anyone use it against me and malign me and my integrity."
Following the allegations Onir, is considering taking legal action against the debutant actor.
"I want to reinstate that I have not molested him, nor promised him anything and I will not seek cheap publicity that he wants out of this but I will fight with him legally," said the director, who has worked with leading Hindi film figures including Juhi Chawla, Sanjay Suri, Shabana Azmi and Boman Irani.
Onir, who has gained widespread public support on social network platforms including Twitter and Facebook, said: "I know that I have done nothing wrong and I am angry that someone misued my trust."
Model-turned-actor Parashar, was the subject of earlier media interest, after claiming that his family had disowned him for appearing in a gay-themed project.
Onir is recognised as one of the few out gay film directors working in Indian cinema.
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