Justice Ajay Mohan Goel on Monday dismissed the FIR lodged on February 16 last year.
The offence is punishable with maximum imprisonment of two years.
In his 26-page judgment, Justice Goel found credible the actor's contention that the complaint was "mala fide" as the woman's daughter had been rejected in an audition by Balaji Motion Pictures Limited run by the Jeetendra's family.
The judge said the contents of the complaint do not provide ground to proceed against the accused, as they appear to be "vague" and "inherently absurd."
Veteran actor Jeetendra’s cousin sister files Sexual Harassment case against him after 47 years
In the complaint, Jeetendra's cousin alleged that the assault took place in 1971 when the actor took her to a room at a hotel in Shimla. The room had two separate beds. While she was sleeping, he allegedly joined the two beds and tried to outrage her modesty. He was drunk at that time, she claimed.
The actor's cousin claimed before the registration of the complaint that the #MeToo campaign against sexual harassment encouraged her to speak against the "abuse".
In 1971, she was 18 years old while Jeetendra was 28.
Jeetendra had filed a petition, seeking the quashing of the FIR. His petition said his family ran a media house and his cousin was enraged as her daughter was not selected for a role.
The court observed said it is evident from the record that the daughter of Jeetendra's cousin did give an audition for Balaji Motion Pictures Limited.
"This lends credibility to the contention that the lodging of the FIR was an act of mala fide and a result of the daughter of his cousin having been rejected," the court said.
It added that the contents of the complaint are "vague". They lead to the conclusion that the allegations are "so absurd and inherently improbable, on the basis of which, no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused", the judge observed.