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Riger: For that, we have to know what was the issue to begin with in that Village where MC got arrested.
Considering that "no complaints" were filed against MC by the Villagers, i guess the issue was probably related to MC saving them instead of causing any problem. The Knights probably came in (after the situation was solved), saw that MC solved the issue for the Village, noticed his strength, and pushed a fake case against him, to treat him as a Slave and exploit him (my guess is that maybe a "damage of property", case was filed against him, which MC accepted as he would have probably damaged something considering his strength, but the villagers were probably thankful for him solving their issue so didn't file any complaint).