I think they are to stretching it too far.
Have you joined any other firm after the exit? And a relieving letter is't crucial for regularisation? Have you not closed your bank a/c with them? You should have collected the relieving letter in the first instance before leaving, that should have been wise. Yes you missed it. Now, if it's very crucial for your future try to patch up and collect the relieving letter and try to convince them not to precipitate the issue. Make a visit and finalise all pending issues in one go.
18th February 2019 From India, Bangalore