Court officials said Wednesday the two disputing parties had arrived at a compromise.
The first information report (FIR) had been registered against Deol on the basis of a complaint lodged by Hajipur-based film distributor BL Films in 2003. It was alleged that Deol had received Rs.1.3 million from the firm for marketing rights of a Hindi film, "The Gandhi", for north Bihar and Nepal.
The film could not be completed for various reasons.
Deol's lawyer said the star had paid Rs.2.3 million to BL Films for an out of court settlement.