Mr Bhadana, then Congress Member of Parliament from Faridabad in Haryana, said that since Arvind Kejriwal has retracted his alleged defamatory statements, he and the chief minister together have decided not to contest the civil defamation suit.
Additional District Judge Surinder S Rathi considered the submission on behalf of both the leaders and disposed of the matter, a court source said.
Advocate Surat Singh, who appeared for Mr Bhadana, said that he withdrew his earlier statement saying that he was misinformed by his former colleagues and he had no intention to malign the reputation of the BJP leader.
In his petition, Mr Bhadana had contended that Mr Kejriwal had publicly made the defamatory statement on January 31, 2014.
He had contended in his plea that despite sending a legal notice to Mr Kejriwal, the AAP leader has neither withdrawn his comments, nor apologised for the same.
Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on ndtv.com/elections. Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections.