Dispute in partnership

My friend was about to run a business with his own firm and he invited me to be the part of business by giving me 50% stake in firm as well as profit and liabilities in lieu of some amount as investment and i invested in his and new firm came to known as LMN firm.My partner was 1st part partner and i was second. He intended to buy running franchisee based restaurant from the owner of that franchisee who bought that from XYZ fast food chain few years back . The restaurant which my partner intended to buy is bought by paying a specific amount to owner but no paper transfer of restaurant to our LMN firm was done.business was running at the name of previous firm and through our partnership firm we just used to buy raw material for running business and bank account of our firm for financial transactions. After quite sometime my partner started taking less interest in the business and problems arises between us due to which after mutual consent we agreed on terms where i will pay all the remaining debt on the firm which we took while purchasing that restaurant and his investment was paid back already from the returns of the business along with returns and no extra amount has to be paid to him.He left the business and no dissolution of partnership firm was done as my partner didnot agree to it, neither any written agreement was done between us as it was just a verbal agreement. after a year i talked to the xyz fast food chain for closing this restaurant as it was not paying off good. so after clearing the debt i closed that business but again that partnership firm was not desolved.It still stands up in paper and no business is done on its name. After closing that restaurant i reached an agreement with xyz fast food to open another franshisee on name of new firm registered by me at new place.I registered my own sole proprietorship firm named ABC foods and we opened new restaurant at new place. After seeing this my partner with whom i opened LMN company reached police station against me that i have frauded with him and demands his investment back and accused me and XYZ fast food company that we ousted him as partner so that i could take over the whole business by my own..Kindly guide me on few issues.First is How can he demand his investment back as he invited me to be part of his firm and i invested in his firm and he got his investment back in form of returns?. on the other hand we had the verbal agreement on which we both agreed when he left the business and everything was settled down verbally.Secondly can he approach police as in partnership agreement its written disputes to be settled though arbitration as both parties has to appoint arbitrators?.How can he claim money from me as he intentionally left the business and he didnot agree to disolve the partnership at that time?.How can he bring my new firm in question as i started it by my own after closing the business in LMN partnership firm?