The 37-year-old actress and mother of two will be making her Bollywood comeback in the lead role.
Bhatt told DNA India: "The strength of Dangerous Ishq is it's mind-blowing idea. The part that she gets to play in the film is a dream role for any actor. Karisma too understood that when Dangerous Ishq was narrated to her.
"She comes with enough experience to gauge a film's strength at the script level itself. Once she agreed in principle, we developed the film a little bit more and were ready to roll."
He added: "I think everything is just about timing. Karisma was at that stage in her life where she had decided to do a film. She was willing to give Bollywood a shot and was looking for the right script.
"This was the time when I and my team were sitting with the casting director and Karisma's name popped up."
Kapoor has reportedly vetoed nude scenes in the film, with co-star Rajneesh Duggal confirming that the pair will not appear in intimate scenes together.
The star has said that she is returning to Bollywood for her children because she wants them to know how much acting means to her.