Not able to pay the amount as promised

Dear Sir I had organized an event and for the same I took help of an individual and promised to pay him Rs.1.8 Lacs for his services. This promise was formalized on a written document bearing the letterhead of the festival and my signature. But the festival was loss making so couldn't pay him the amount as promised. I had given him two cheques of Rs.1 lac and 0.80 lac for some date in the last week of April. But the cheques bounced due to stop payment made by me. The cheques also bounced in the month of April. In the month of June I paid him 0.60 lacs. But since then he has been threatening me verbally via phone. I have sent him an email requesting I can pay him only Rs. 0.5 lacs more and the balance he will get only If I get the dues from the State Govt. I have also asked him to return the cheques. If he acknowledges and accepts my proposal via email only then I will give him the remaining amount. In brief is this sufficient to prevent me from any legal liability. Please advise. Regards R