How to defend false SC atrocity case and threats?

Please advise me on how to handle an atrocity case filed against me and my co-postgraduates by a fellow postgraduate belonging to an SC caste. She has made false allegations against us due to personal vengeance. She is now threatening that the case will be prolonged and that we will have to compensate her if she withdraws the case. The allegations are baseless, and she has already received compensation from community welfare. Now her family is demanding we pay their expenses. They have also published our photos in the media without blurring our faces, and our families have seen them. They have threatened to cancel our licenses if the case continues and we do not agree to their terms. It is unfair that we are being tortured for no fault of ours. Please advise what we should do.