The university's media in-charge Smita Polite said while one student was suspended on the charge of sexually harassing fellow students, another was shifted to a different hostel.
A complaint against the two was received a month back alleging they sexually harassed fellow students and action was taken against them following the set procedure, she said.
An Internal Complaint Committee probed the matter and submitted its report on March 20 night, and after following the norms and approval of the Chancellor, one student was suspended today and another shifted out of his hostel yesterday, she said.
Superintendent of Police of Nalanda Kumar Ashish said he intervened and took a delegation for talks with the VC after which the stir was called off.
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After going through the details of the complaints, he asked the university authorities to register an FIR against the student, who has been suspended. He was also accused of sending threat mails to classmates.
Meanwhile, late this evening the interim Vice Chancellor resigned owning "moral responsibility".
"I have relinquished all the administrative positions and I have also advised the Chancellor to institute an inquiry into the period of my term as Interim Vice Chancellor. If I am found guilty of any willful error I will quit the university," he wrote.
Bhatkar, the man behind India's first supercomputer-- the Param series-- was appointed as the chancellor of Nalanda International University last month.