Naik had filed a complaint against Shastri that he abused him after South Africa piled up 438 runs in the fifth and final ODI at Wankhede Stadium on October 25.
Vengsarkar today heard the two former India players during a meeting and advised both Naik and Shastri to bury the matter which he said "was a result of misunderstanding between the two former Mumbai players".
"Both shook hands and Mr. Naik decided to withdraw the letter written to Mumbai Cricket Association," Vengsarkar said in a statement.
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