The two had reached an out-of-court settlement over the issue last week after which Additional Sessions Judge Abhay Thipsay asked Bhujbal and Rane to file a joint application for withdrawal of proceedings.
Both of them were present in the court on Wednesday.
Bhujbal, the then Deputy Chief Minister and Nationalist Congress Party leader, had filed a case against Rane in 2000, after the latter alleged that the residence of Bhujbal had become a den of Inter Servicees Intelligence agents.
Rane, at that time, was in Shiv Sena. In 2005, Rane joined Congress and was inducted in the state cabinet.
The remarks were made by Rane in the context of meeting of bomb blast accused with Bhujbal that was held at the former Deputy Chief Minister's residence. The accused, who were out on bail, had urged the minister to expedite the trial.
Bhujbal had claimed that Rane's allegations were baseless and aimed to malign his image. Being aggrieved, he initiated criminal proceedings against Rane in in Mazgaon sessions court.