that's the point. Arnav was extremely cool with Sheetal. It's hard to believe that he had any kind of intimacy with her in the past.
It can be either sexual or not. In western cultures it's usually sexual and hence the posts on urbandictionary say sexual. But a fling is nothing more than time pass.And what I'm saying is that IF it was sexual, Arnav wouldn't have been so at ease with sheetal in khushis together. He wouldn't have stopped sheetal to chitchat when she tried to leave. He wouldn't have delayed it further by talking to the kid. He would've tried to get out of there as fast as he could.