498a settlement for money or not

Both of the subject sections are non-bailable although sec.406 is compoundable before the court. From the given facts it appears proposal for amicable settlement is merely a trick to extort a huge sum of money from you posing threat and giving alarm to omit you to defend the case as per law which your wife and her relatives cannot do legally.  If you have sufficient prove to establish that threat then you can file a counter case against them u/s.503 IPC as causation of alarm.

Learned advocate Mr. Sainath and senior learned counsel respected Roy Sir have given valuable tips/opinions as  well as rightly observed the misuse of free service in this portal by many despite being given proper and good opinions. Respected Roy sir's latest opinion explains and answers the query more than sufficiently hence nothing more to add to it.