Procedures to get full clearance after withdrawing a wrongful cheque case

We have an issue with an unreturned cheque back on our 2019 to 2020 contract (RESIDENCE FLAT CONTRACT).

We deposited a cheque to the landlord for the last quarter payment, but instead of this, we settled to pay by cash and they told us that they will return the cheque to us (we have the receipt).

Until the contract end, we were expecting that everything went fair and well. We renewed for another year this same contract (July 2020-July 2021) until the end and terminated this last contract last July.

We settled everything and even received our deposit. Unfortunately, on September 6, 2021, they filed a complaint at the police station regarding this cheque.

We went to their office and told us that it is their mistake. their legal told us to go to police station to pay AED1,050 to cancel this report. We don't know if this is to cancel the case.

Any advice, we want to clear our name from this case. We want a refund, we want to clear our name and receive our cheque back.