Modric is currently being chased by Real Madrid, who are believed to have lodged a £27m bid for the Croatian playmaker.
However, their approach has been turned down, with Levy reportedly asking £40m for the 26-year-old.
Kranjcar, who has now left Spurs for Dynamo Kiev, said that Levy promised Modric that he could leave last autumn after rejecting his transfer request last summer.
"I know that the chairman talked to him face to face last autumn. He promised Luka he would let him go, and now he's condemning him," The Mirror quotes Kranjcar as saying.
"Levy did everything to protect the interest of the club and make a profit. He has also used lies to deceive the public, which is allowed in business, but if you were in Luka's shoes, you would probably do the same as him.
"To have an offer from Real Madrid is a once-in-a-career opportunity. I'd do anything to get to Santiago Bernabeu. Playing for Real Madrid is the greatest privilege in any footballer's career, even if I prefer Barcelona. That's why I understand Luka."
Kranjcar spent three years with Spurs, making 73 appearances.