If you want cancelling your marriage after the engagement, it’s important to remember that the engagement is like an agreement instead of a final contract. Therefore, any party to the engagement has right to repudiate it on a valid ground. Marriage is a final contract which confers legal responsibility on the parties.
Cancellation of the engagement is possible on valid grounds, and the aggrieved party is entitled to compensation and recovery of expenses incurred in the engagement ceremony. Be prepared to pay expenses and return all gifts received. Communicate clearly with the other party and their family. Be ready to return any token money you received in the engagement ceremony.
If the cancellation is due to dowry demands, the guilty party is liable under the Dowry Prohibition Act. You said that your fiancé’s family is making false allegation of dowry. If you prove that the alleged allegation of dowry demand is false, then your fiancé’s family is not entitled to get compensation in lieu of cancellation of engagement.
If you are threatened with false charges of dowry or harassment, document these threats for possible legal action. When they lodge FIR against you for demand of dowry then approach the High Court for the quashing of that FIR. Evidence of threatening will further empower the court to quash the FIR.
There was no physical relationship between you and your fiancé, so she cannot file a criminal case for sexual harassment. Hugging and kissing with free consent does not constitute an offense unless has the sexual overture. Consensual relationships provide protection against false accusations of sexual harassment in case of cancellation of the engagement.