Options for Quashing of court case

Hi, This is related to the my existing Query . My brother got engaged to a girl in January 2014. We had to break the engagement as the other party started investigating and threatening my brother on the basis of false reasons. The girl filed a false FIR with Police under section 354 A, 406, 506, 34 IPC involving me and my mother as well. The girl is saying that three of us took money from her. This FIR was filed in my home state(HARYANA). All three of us got bail from the court and the case is running in the Court. The evidence has not yet been done in court. Challan has not yet been sent to the court by IO(investigating officer). 1.Can police dissolve an FIR/Case at their end if the opposing parties compromise? If yes then what is the process and is there an MOU required by police to be signed between the parties? 2 How does the witness turns hostile i.e by not appearing in the court or by stating that the charges that are stated are false?Which one has more weight? 3.Can the court dissolve/quash case if the witness turns hostile ? Does that help us if the opposing party tries to put false case in future? 4.Is it better to get the case quashed in high court rather than the above process and why? Thanks