The PCA had summoned the off-spinner for a hearing over the latter's comments that Chappell's strict regime had instilled fears and insecurity among members of the Indian team and that the Australian was using a divide and rule policy.
PCA President I S Bindra, after the hearing by the Administrative Committee here this afternoon, said that the bowler was told that his action was "not in consonance with the code of the BCCI and the state association."
The 'Turbanator' was given the reprieve apparently after he tendered an apology to the Committee.
Harbhajan told the Committee "that in hindsight he has realized he should have avoided airing his views the way he did in public," Bindra said.
Harbhajan was not allowed to take questions from the large number of media persons present.
A statement released by the PCA said, "Harbhajan appeared before the Administrative Committee of the PCA to explain what he actually meant to say in his statement (on) Sourav Gangully's captaincy and on coach Greg Chappell's working."
The Administrative Committee has "decided to treat the matter as closed after Harbhajan has assured the PCA that he would never again do anything that would hurt him, the state association, the Board and Indian Cricket," the PCA statement added.
Bindra said PCA had the powers to summon Harbhajan even though the Indian Cricket Board did not deem it fit to do so. "He is registered with us and hence today's action," the PCA president said adding, "we called our son, heard him and as a parent body gave him advice."
Bindra said that the performance of Team India was more important than what took place in the dressing room.
"Team India is prime, Team India is one. We are basking in the glory of the 1983 World Cup win on the basis of the performance of the team," he said.
Bindra, also a former BCCI president said, "it would have been better if this (Chappell-Sourav spat) was controlled on the first or second day."
"I am very happy that the Review Committee of the BCCI has sorted out the issue. In (Board) elections you can expect bitterness, but as far as Team India is concerned it is one.
"I do hope that in the interest of the Indian Cricket this (the truce) will continue," Bindra said.