Tortured, Harassed, Blackmailed and filed 498A By Estranged Wife

Dear Sir, I am writing to you as my last hope. We have been falsely booked into a dowry case and domestic violence act and there is no one to pay heed to our side of the story. Last 1 year has been very very tough for me, my family and some of my relatives as we have gone through mental torture and threats. We have been booked under section 498A, 323, 504, 506, 406 and 314 of IPC. My wife and her family have filed a dowry case against us. They have mentioned in the report that me, my family and my relatives are torturing my wife from the very next day of my marriage and demanding for 1 lakh in cash and a car. And also she mentioned that my mother tried to kill her by putting poison in her food, my father tried to burn her by putting diesel on her and my brother tried to kill her with gun but all the time she was lucky. Also she mentioned that my sister and her husband forced her to suicide. My sister got married before my marriage and since then she is staying with her husband only. My sister's husband is working in an IT company. Why would my sister and her husband force her to suicide? If we were torturing her since very next day of our marriage then why didn't she or her family complained for last 2 years. All the allegations are false and baseless. There is no truth even 1% also. At the time of my marriage, my wife's family were in very hurry for marriage and we got married withing 15 days of getting the match. Now we came to know that my wife has affair with someone else that's the reason her family was in very hurry. After marriage 75% of time she was with her parents only. Here reality is that 4 years before I had gone for operation because of problem in urianation. My wife found the file and then she made a issue of it. Once her family came to know about this they also made big issue of it and had a panchayat at my house. There they accepted infront of 20 peoples that they don't have any other problem or DV except I had gone for operation. But now they have filed dowry case in pressure of her daughter so that she can live with her lover. In my marriage, we didn't ask for anything but they had given us 1.6 lakh. Whatever money they gave us, we had purchased jewelry of entire money(1.6 lakh) and had given it to my wife. Now they have filed the case in court and have mentioned that they have given 3 lakhs in cash and goods equivalent to 5.5 lakhs. They have put name of all my family members, the person(and his wife also) who helped them to get the match for their daughter and my sister and her husband. Since my sister's husband is working in an IT company, they have put the name of my sister and her husband intentionally so that they can get the money from them. Also they threatened the father-in-law of my sister and told him to settle the case soon or else his son will have to go to jail. They have tried to negotiate 3 times to get back the money they have spent but when we get agreed they keep on incresing the amount. Now the case is in reconcilation comittee where they are trying to make the settlement before sending the matter in court. My wife's family is demanding 1.6 lakhs in cash and all the belongings. Even though my wife has already stolen all the jewelry(approx 1.5 lacs) and Rs. 25,000 cash from my house but still we are ready to pay 1 lakhs in cash and all the belongings they have given but my father-in-law is not ready for this. We are not in a position to pay more than this. I am under depression and sometimes think to commit the suicide. But by committing the suicide I'll not be able to help my family and relatives in any way instead it will increase their problem. I don't have any choice now. I have lost all my hopes and my faith in God. Why this world is so cruel? What is your opinion? Shall we fulfill their demand or shall we go to court for further hearing. I am afraid of power given to women by Indian constitution. Mostly women get the preference. Please please give me your opinion. What shall I do in this situation?