It is probably a garbled account of more than one fracas that got mixed up, as there seems to be a ban on discussion of such matters in the military to prevent inflaming the matter.
India has on multiple occasions safely returned Chinese military, fugitives,military porters and hunters that crossed the border in Arunachal. None of these are known even to other Indians or media, but the locals know it as they are embedded with the military as porters, suppliers, soldiers.
Right know the border is tense so " civilized" response from both sides may take a backseat.
again, sounds completely made up. indians might be a bunch of savages(ambushing PLA negotiators and what-not), but the PLA is very much civilized and is shown by their treatment of prisoners and returning all weapons taken, both in 62' and today.
these last few real events on the borders has shown that Indians will continuously lie and lie and lie about what actual happened.
they will copy and paste ww2 chinese generals' names from wiki and say its the list of chinese casualties in 2020.
they will use a old photo of chinese graves to say its the graves of the recent dead.
they will take shitty bollywood movie screenshots and say its pics of the actual confrontations.
they will tell you they've had no casualties until forced to face the truth via actual real pictures and videos then they will lie and say "well the chinese had more casualties"
they will tell you they took hundreds of prisoners, yet in reality took zero. and of course cannot provide anything, video or picture, to back up their claims because their claims are nothing more than lies.
the list goes on and on and on.
fact is unless the captured civilians were in actual danger (ie: torture, execution, slavery by the hands of the indians) , the PLA isn't going to go launch of rescue mission, there's no need.
There is even precedent for this, as you mentioned, individual PLA soldiers/patrolmen have gotten lost and got taken by the indians, the PLA then asked for their return via negotiations.
the only case would be if the indians came and arrested the civilians while they were under PLA escort. but the civilians can't be taken under the PLA's noses. for one the indians would never stop gloating about it with real picture and videos if it happened, second it would be a serious incident and would make world news. and 3rd, judging by india's performance against china, from its independence to today, those civilians would be easily rescued if PLA did take action and we would be enjoying even more picture of fresh indian POWs taken by the PLA.
again your story just sounds like more indian lies made to feel better about their cowardly selves until proven otherwise. i'll wait for proof,just like we're all waiting for indian pictures of capture PLA soldiers. i suspect we'll be waiting forever.