Hello,
1) No, the demand notice does not in any way mean that the case filed has been withdrawn. Besides this without involving the accused and the permission of the court the complaint can not be withdrawn.
2) Secondly with the sections included in the case filed the case can not just be withdrawn. As the case is already in the court you don't need to be bothered about the notice being sent to you if it has the same subject matter.
3) Engage a lawyer locally to assist you. Once he peruses the notice he will be able to advice better.