Bhandari and UK's Christopher Greenwood were locked in a neck-and-neck fight for re-election as the UN could not decide between them after electing four out of five judges to the International Court of Justice (ICJ).
Bhandari, 70, received 183-193 votes in the General Assembly and secured all 15 votes in the Security Council to fill the final vacancy on the ICJ after separate but simultaneous elections were held at the UN headquarters in New York.
"Vande Matram - India wins election to the International Court of Justice. JaiHind," tweeted External Affairs Minister Sushma Swaraj.
In a dramatic turn of events, British Permanent Representative to the UN Matthew Rycroft wrote identical letters to the presidents of the United Nations General Assembly and the Security Council before the two chambers were scheduled to meet at 3 pm (local time) for the 12th round of voting.
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"The current deadlock is unlikely to be broken by further rounds of voting. We have therefore consulted our candidate Sir Christopher Greenwood who has confirmed that his candidate for re-election to the International Court of Justice should be withdrawn," Rycroft said in his letter which was read out simultaneously in the General Assembly and the Security Council.
The UK will not have a judge on the bench of the ICJ for the first time in its 71-year history.
Based in The Hague, the ICJ has a bench of 15 judges, five of whom are elected every three years for a nine-year term.
Established in 1945, the role of the ICJ is to settle, in accordance with international law, legal disputes submitted to it by states and to give advisory opinions on legal questions.
Rycroft thanked judge Greenwood for his service and paid tribute to his outstanding contribution to the working of the court and to the development of international law.
However, the British Ambassador noted that this was the right time to adopt the joint conference mechanism, which he had pushed earlier, but was opposed by India.
The statue of the ICJ provides in its Article 12 that if after the third meeting, one or more seats still remain unfilled, a joint conference may be formed any time at the request of either the General Assembly or the Security Council for the purpose of choosing one name for each seat still vacant to submit to the General Assembly and the Security Council for their respective acceptance, the letter said.
"It is the view of the United Kingdom that this election would have been an ideal of what was the mechanism envisaged by the courts upon statute to break the current deadlock," it said.
"It is also the UK's view as that of other delegations that some thought needs to be given to these proceedings before the next election in order that it might be used when it is really needed," the British Ambassador said.
In the fourth round, Bhandari had received a majority - 115 votes - in the General Assembly, while Greenwood received 76 votes.
However, in the 15-member Security Council Greenwood got majority (nine) of the votes as against six votes by Bhandari.
As a result, another round of votes was scheduled for yesterday.
The voting in the General Assembly which overwhelmingly favoured India is reflective of the new global order, which is not pleasant to the world powers.