England are 1-0 down in the series after a seven-wicket second Test defeat at Trent Bridge which was overshadow by unsporting behaviour on both sides.
India batsman Zaheer Khan reacted furiously after jellybeans were left in his crease while he was batting, brandishing his bat in the direction of gully, where Kevin Pietersen was fielding.
England's own chairman of selectors, David Graveney, branded the jellybean incident "childish".
More seriously, India's Shanthakumaran Sreesanth was fined 50 percent of his match fee for shoulder-barging England captain Michael Vaughan.
And the fast bowler was involved in another controversial incident when bowling an illegal 'beamer' at Pietersen, the batsman just getting his head out of the way in time.
Meanwhile the amount of sledging by players was frequently excessive with England wicket-keeper Matt Prior one of the worst offenders.
But Panesar, who himself this season has received a verbal warning for over-enthusiastic appealing, said nothing untoward had happened in Nottingham.
"We all want to see cricket played in the right spirit and that is what happened," the England left-arm spinner explained Monday.
"You want to be competitive but you need to play the game in the right spirit, which is important.
"Peter Moores is the new coach with new enthusiasm and we are trying to emulate that enthusiasm in the game.
"We haven't had any instructions about how to conduct ourselves. We all knew the game was played in the right spirit and as long as we keep doing that I am sure everything will be fine."
Panesar was selected Monday for England's upcoming one-day international series against India but didn't make it into the squad for the inauguaral World Twenty20 tournament in South Africa next month.
"My character is that I like to be involved in all forms of the game - you want to be part of things like the Twenty20 squad. But missing out does give you an opportunity to prepare for the winter (tour to Sri Lanka), so you can take it is a positive as well," said the ever optimistic Panesar.
England, who came within a wicket of taking a 1-0 lead at Lord's, now find themselves having to win against India on the other side of London's River Thames if they are to preserve their six-year unbeaten run in home Test series.
They came from 1-0 down to secure a draw in India 18 months ago and Panesar is confident of a repeat performance.
"In that first Test maybe the man upstairs didn't want us to win and the clouds came. These things happen in cricket and then in the second Test India played very well," said Panesar, speaking at the launch of an Urban cricket arena on a housing estate in Brixton, near The Oval.
"It will be tough but if we play the cricket we have been we have a chance to do well."