False case of molestation can i file defamation case if they withdraw

My neighbour has files a FIR stating that I beat up and tried to molest his daughter finding her alone in the corridor of our apartment, while in actual there was a scuffle between my sister and his daughter and I intervened later just o separate them, which was also witnessed by other neighbours. Now the case has gone in to trial u/s 30, The informant was absent in first hearing. Was present in the second hearing but did not bring the victim (his daughter) hence next date given, During second hearing, the informant requested my counsel that they are agreeable to compromise like withdrawal. Now my question is that, 1. he has filed a false case accusing me of molesting his daughter which has caused damage to my reputation in the society as the neighbour has been telling this to others, and also caused monetary loss for court procedure - if he now withdraw the case can I file a defamation case. 2. If trial continues when can I file a defamation case.