We spoke to our lawyer and he said it was completely our decision, whether to pursue the FIR/IPC 509 case further or to compromise with him. He said that since the evidences and witnesses prospects are weak, a compromise is a good idea. So, we need to make the guy take an undertaking at the police station. (We're very tempted by this... its the easy way out. The milkshop guy had come to our house again, a little while ago. My wife is alone in the house. She didn't open the door, and it seems he was shouting his apologies from the street.)
The lawyer also said that the Consumer Court case is interrelated to our decision on this. If we are reaching a compromise with this guy, he doesn't see much point in pursuing it further. But, I disagree here. Anyway, he said that we should go to the court tomorrow and hear it out. The Consumer Case was starting to look strong since we found 3 "witnesses"! We are in touch with 3 girls who were overcharged by this guy before, a few months ago. They had fought with the guy and taken back the money. Good for them. Unfortunately, they are not interested in getting involved with this guy again. Bad for us. We are trying to find out if any other people have had similar problems with this guy, but nobody wants to be a witness in court.
The last option is to make a document, get it signed by these girls and give that to the judge. But the lawyer does not think much of this. He said anybody can make and sign the document. Its not really valid, but still, we can take it and see how the judge responds.
Update: Seems these girls have left for their home town to attend a marriage, so no document from them. Lets see what the judge says.
Read Fight for your rights! - Update 13.