The woman had come along with her brother to purchase food for animals when Singla molested her, police said.
People gathered at the spot and Singla fled, but was later summoned to the police station on people's demand.
He sought an apology from the woman and from members of Panchayat and elders of the village who intervened in the matter at the police station in Hansi.
Satisfied by the apology offered by the trader, the Panchayat members requested the police not to register a case against the trader and let him off, police said.
After observing that the situation was under control, police let off the alleged molester with a warning not to repeat such a crime in future.