Hi,
The action they are threatening you under is that under the Extradition Act of 1962. Basically, in such matters the offenders are handed over to the country where the offence was committed i.e. the requesting country.. you may check this link for more reading.
"http://cbi.nic.in/interpol/extradition.php"
Interpol and red notice being issued for a cheque bouncing offence seems unlikely. I doubt if that is even a part of our extradition treaty with the UAE.
First of all, an issue lies in whether your act is criminally punishable in the UAE. I have even heard recently that the UAE is decriminilizing cheque bounce matters. Check this link.
"http://www.thenational.ae/news/uae-news/bouncing-loan-cheques-in-the-uae-no-longer-a-crime"
Incase the matter is civil, a civil court judgement would be treated as a 'foreign judgment' as defined in the CPC and dealt with accordingly. Incase of a criminal matter, if it is an offence, you may have to go through section 4, section `188 CrPC and the allied laws for better understanding of the matter.
I apologize for not being able to give you any detailed opinion as time would not permit me to spend that much of it pro-bono. You may drop in a mail at (prerakchoudhary[at-the-rate-of]gmail[dot]com) incase you need professional advice and services. In that case, we would seek help from our UAE counterparts and formulate a detailed opinion on the subject for you.
As for the platform, on a personal level , again, I suggest you face the trials.. approach a good banking lawyer from the Gulf.. there is absolutely no harm contesting a matter if you are on the right side. You are not a wilful defaulter so there should not be any hesitation on your part to say so before the Hon'ble Arabian fora. You could consider some aspects of the insolvency law incase you are absolutely unable to pay. I don't see any reason trying to run away from one place and seeking refuge in another on grounds of morality. I would personally suggest you stand on the path of truth and face the prosecution there with the help of a good lawyer..
In any case, professionally you are free to approach us or any other good lawyer/ law firm in India or the UAE and you have all the right to know the law and its application to your case.
Regards,
Prerak