The four-time champions came under pressure as Abdul Samad was sent off following his second yellow card just before the end of the second half, but the damage had already been done with some outstanding performance by Muslim FC to curtail the champions.
Former KRL striker Kaleemullah, who is now playing for Kyrgyzstan's FC Dordoi, said it is disappointing to see KRL among the lower half of the league table.
"It’s obviously painful to see them like this," Kaleemullah told The Express Tribune. "They really need some strong players now.
"The team is young and inexperienced and they will need at least two years to play at the standards expected from KRL.”
KRL continue on seventh place with 26 points, while Muslim FC slipped down to sixth with 29 points.
Meanwhile, Wapda replaced Muslim FC on the fifth place with their 2-0 win against Baloch FC at the Dr Muhammad Ali Shah Stadium.
Both teams played a goalless first half as Husnain Abbas scored the opening goal in the 60th minute, while Waqar Shah sealed the win in the 77th minute.
According to Wapda captain Arif Mehmood, Dr Muhammad Ali Shah Stadium can be tricky for his side and that they have witnessed upsets at the venue because of its size.
"Our team played well," said Mehmood. "But this stadium is small and we are accustomed to playing on big, standard-sized stadiums.”
In Thursday's fixture, K-Electric will play Railways at KPT Stadium.
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