Bhatt, 45, her husband Hiteshkumar, 47, owners of Little Gujarat restaurant, and their co-accused Preshni Hiramun, 55, a businesswoman, were arrested in May last year.
They faced charges related to fraud and the contravention of the Prevention and Combating of Corruption Activities Act.
The State alleged the accused sold places at UKZN’s medical school for as much as R500000.
The couple’s attorney, Roy Singh, said his clients could now focus on picking up the pieces of their lives.
“Their health, business and even friendships suffered. They have been living in South Africa for 20 years and built a great brand in Little Gujarat. Their arrests affected them personally and professionally.”
Singh said the couple had co-operated with the Hawks and would continue to do so.
“What was even more hurtful was when their families living in India and London heard of their arrests. Varsha’s parents fell ill. However, her passport was taken away and she could not visit them,” he said.
Singh said that while their reputation was destroyed, the Bhatts always had faith in the South African justice system.
“The manner in which my clients were arrested - by SAPS members in riot gear - had shaken their belief in the legal system. However as the matter progressed their faith and confidence in the legal system was reaffirmed and the ruling last week was a joyous moment for them. They regard South Africa as their home and had at no stage considered leaving.”
On Thursday, the State applied for a year-long adjournment so that the Hawks could continue with forensic investigations into data they had previously seized from the accused.
Magistrate Correl Language withdrew the charges after the State called for an adjournment.
Jacques Botha, representing Hiramun said: “Just for the moment, she believes that justice was done but obviously the matter isn’t over.
“She has been the subject of social media bullying, her reputation has been ruined and it has affected her physically and emotionally.”
Botha said it was disappointing that the State had “just a few experts” that could deal with cases of this matter.