Dhoni was caught in the boundary line by Daren Ganga in the first Test and the fielder seemed to have stepped on the paper ropes which prompted on-field umpires to refer the decision to third umpire Bill Doctrove who took 15 minutes but could not come out with the verdict.
In the end, host captain Brian Lara vouched for Ganga that it was a clean catch and persuaded Dhoni to walk off.
''To say the least it was controversial, no two options about it,'' Venkataraghavan told in the ''22 Yards'' programme on Zee Sports.
''The on-field umpires were absolutely right in calling for third umpire decision. Inspite of various repeated replays, the third umpire wasn't sure as to whether the fielder was inside the boundary or touching the boundary line...if the television replays when referred to the third umpire are inconclusive, I as a third umpire would like to think that he (Doctrove) would have to take the decision then and there.
''At that particular point of time if I had been the third umpire, I would have possibly given the benefit of doubt to the batsman,'' said Venkataraghavan, who officiated in 73 Tests and 52 ODIs before retiring from umpiring in March 2004.
And he felt it would have ''phenomenal'' repercussions if the occasion was a World Cup final.
''Neither side would accept the fact that they were beaten fair and square and there would have been a huge furore. It could be a very very tricky situation,'' he said.
The former captain also felt that Lara had ''over reacted'' himself on the occasion.
''The TV replays were inconclusive and Ganga too was unsure, so how can the captain, who is right in the middle, say that Ganga is correct? I mean it's one thing to have belief in your players. Lara of course wants to play the game fair and square- I don't deny that one bit but at the same time, in this particular incident Lara overreached himself,'' he said.
The legendray offie of his era also felt that technology can't guarantee a foolproof system.
''Technology has advanced, but to what extent? ICC wants to get the decision 100 per cent right and they want the players to feel happy about it...There is nothing wrong in it. But what happens in a crucial decision, the last ball of the day of a Test match, something like that happens and since it is needed where do we go from there. It is pretty difficult, technology has helped us but I don't think it is 100 per cent correct.'' Describing himself as a traditionalist, Venkataraghavan said technology was welcome but only upto a point.
''I am traditionalist, there are no two opinion about it because I played cricket in an era when there was no television apart from countries like Australia or England. I would like to use technology to the extent that it is good for cricket.
Venkataraghavan was not much impressed with the Hawk Eye either.
''If you go by Hawk eye, probably a Test match can be over in a day. Cricket is a game of glorious uncertainties and I would like those uncertainties to be kept the same way. Probably 129 years we have enjoyed it the same way and if technology is going to come in the way of development of game, I don't like to accept it,'' he added.