The accused, some of them members of Andheri Gymkhana in the city, had moved the High Court, alleging illegal detention.
Division bench of Justices V M Kanade and P D Kode, in the order today, also asked the police and the state to pay compensation of Rs 1,000 each to the men and Rs 25,000 each to the women.
Earlier, the judges had stayed the probe, lashing out at the police for illegally detaining the senior citizens for playing rummy and bridge at the Andheri Gymkhana.
The petitioners had alleged that on August 10, 2011, they were playing cards at the Gymkhana when police arrived, and took them to the police station. FIRs were filed under Prevention of Gambling Act and they had to spend a night at Andheri police station before getting bail.
The petitioners alleged that they were not allowed to eat, make calls or even to take their medicines/injections. An old man, who had his leg in a plaster, was not allowed to sit, the petition said.