Regarding advance payment from the freelancer

Sir My name is Vishal and I started a project of converting scanned or pdf files into word document on in the last week of September 2015. I awarded this project to a freelancer "Vinita khandelwal" on this web. At the time of final negotiations we were not agreed on any advance payment. She accepted the project and started the work. On 27/Sep/2015 she delivered us 2 files having 25 pages worth Rs 325. But after then she started asking for an advance payment of Rs 1666 and stated that freelancer cut some comission from her account for accepting the project and I'll have to pay that. Although I created a milestone of Rs 1666 which is a facility of for the safety of employer and freelancer. Once it is created an employer can't cancel it and it can only be release it. only freelancer can cancel it or if not released by employer after submitting the work, a freelancer can file a dispute against it. Sir/Madam freelancer take commission from both sides employer and freelancer and both parties will have to pay on their own. I paid Rs 354 from my side. We said to her that we'll pay her once she'll submit our files (7 files containing 96 pages) which are worth of Rs 13*96 pages = 1248. But she didn't accept it and she is adamant on paying Rs 1666 as advance. She filed dispute against us on even when we were agreed to pay her once she submit our remaining files to us. We also replied on the dispute and proceeded that matter to "Arbitration process " but she declined to take part in arbitration process and now she is threatening us to file legal case against us "under Section 403, 405, 406, read with Section 420 of the Indian Penal Code (IPC). ". Sir/Madam we doing job and doing our study at the same time and everything is financed by on our own. Sir we are trying to start a start-up and we have limited funds to complete all our initial requirements. Sir we cannot afford to have legal advisers right now and we do not want to stuck in any legal issues right now. Because of Vinita khandelwal we have already lost about 2 weeks, we are lagging on our schedule and have lost money as well. Now a legal case will be too much to handle for us. So if any of you can help us in this issue, I'd highly thankful to you. I have all evidences of our conversation which I submitted to "Dispute matter" and "Arbitration process" on Sir we are also preparing for government jobs as well. So will this case can affect of our joining in any government sector ? will we able to join government job if she files a case against us???? Please please please help us