Arrest based on a civil agreement 420' 506

Hello sir , My brother in law had a plot of 200 sqyrds, he was planning to sell the plot for 10 lakh and some X planned to purchase for the same amount of 10 lakh then there was an agreement where he took an advance amount of 2 lakh rupees from X and signed a non registered agreement with a condition of giving the balance within 20 days and then to registrer the land to the X.... CLAUSE (conditional agreement of within the time frame I,e within 20 days if the registration was not happening agreement will be cancelled and 2 lakh won't be returned)later on he sold the property to Y for the same amount and then agreement got cancelled automatically on the 21st day after 2 months X came to know that my brother in law sold the property and intentionally X filed a complaint in the local PS as a cheating case and X offered a lumpsum amount and then station house officer meanwhile my in law settled an amount of 1lakh on humanity grounds because he was not interested to involve in unnecessary arguments and took the original agreement from X but intentionally due to X cunning attitude he filed an FIR on December 30th 2016 and arrested on January 21st 2017 and sent to remand immediately and we applied for bail and twice it got rejected what is the right to arrest my in law when he settled the amount and took the original back. What is the option for me now to get the bail and can I later file a complaint on police for arresting unnecessarily and can I file a deformation suit on X