Blackmailing

Dear Sir, I am amarnath, working as a freelance developer, Couple of months back (May -2014) I hosted a web site for my own, one of my cousin brother, introduced his collogue and requested me to provide my source code to him for his survival - because of his termination from a company, I agreed to develop a new template design with my source code and he committed to give me a 50% share in his earnings, he also committed to pay 20,000 Rs every month as a salary. he transfer 2,200 Rs in to my respected account in three months time, after completion of 80% project i requested him to pay my three months payment, from that day onwards he is trying to blackmail me and posting complaints against me and my cousin bro in icomplaints and consumer forum . Firstly he started blackmailing me and my cousin to remove my site from online and demanding me to pay 10,00000 compensation, to remove his complaints against my site He is spoiling my website reputation in several ways like: • Creating blogs using my site-name and posting comments against my site and my nature with different names. • Trying to create me and my cousin bro are cheaters in the society I wasted my time of 7 months in development of his site and didn't get anything from him; i have the entire mail track which I received from him regarding site development and updates of template design. He is damaging my site and my reputation in the society with Jealous, Please give me your valuable suggestions on what to do and what not to do Kindly help me to stop him and how to claim against him regarding my website and my reputation damage. Thanks & Regards Amarnath