The protesters turned violent on Wednesday night when the police did not allow them to proceed to the site of the temple demolished by the Delhi Development Authority (DDA) on August 10 on the orders of the Supreme Court.
Police have arrested 96 people for the violence and booked them under relevant sections of the law.
DCP (southeast) Chinmoy Biswal said "Police observed utmost restraint, but the mob turned violent and started pelting stones and arsoning and even damaged public property. We have to put in reasonable force to disperse the unruly mob from the area in order to restore law and order.
"In the process, 96 rioters were apprehended from the area. The accused were produced in front of the magistrate and have been sent to judicial custody for 14 days."
Biswal added that force was deployed for the safety of the residents and also to ensure any unlawful activity doesn't take place in the area.
Local shopkeepers had opened their shops after keeping them shut on Thursday while residents resumed their normal chores.
"Heavy security is deployed and the market association had a meeting with the police who have assured that no unlawful activity will place. We trust the police and have opened our shops. There is a little fear after seeing Wednesday night's incident but we are working our way back," said Rahul Gupta, a shopkeeper in the area.
A wall has now been erected around the land and a signboard placed which displays the Supreme Court order declaring that the land belongs to Delhi Development Authority. It has also declared any illegal construction or possession of land as a punishable offence.
( With inputs from IANS )