Stuck Without a Relieving Letter: How to Handle Unethical Demands from a Former Employer?

I was employed with a company as a purchase manager. However, upon receiving a better offer, I had to leave the company in a week instead of the committed 2 months' notice period. In lieu of that, I paid for the rest of the notice period.

Documents in Possession

I have the following documents:
- Accepted resignation letter
- No Dues form signed by all the mentioned departments
- Receipt for payment of notice period
- Form 16
- Bank statement

Issue with Relieving Letter

Now, upon demanding my resignation, my company took some lower quotes from the market regarding the purchases I made and is not releasing my relieving letter. Instead, I'm being threatened to pay the difference of about 7 lakhs if I want my relieving letter. My new company is demanding the resignation letter daily. HR is not a very strong group in that organization, so I can't take much help from them either. Is there anything I can do regarding this?

Regards.

I have some specific questions:

1. Does buying out the notice period relieve me or even reduce my responsibility for Knowledge Transfer?

2. The cases they have brought up are nothing more than negligence. A purchase decision in an organization is a collective decision, and I was not the signing authority, but I had countersigned the POs. Am I right in thinking that?

3. Can my new company fire me if I'm not able to produce the relieving letter? I have only presented the above-mentioned documents proving my joining date, last working day, and my salary.

4. If my new company does a physical verification, I'm afraid that they will come to know about the issue. Will I be given a chance to explain my part?