Ministry is sending orders to Consulates to cancel the Police clearance of 498 accused. Explain to consulate the real story, they have the final call whether to cancel or not cancel the Police clearance. Canceling Police clearance doesn’t mean much if you are going to be in the same job.
It is not easy to impound passport. Get a local immigration lawyer ans discuss with him. I have a local lawyer and claims that he has plenty of judgments to prove his case either way. He has caused impounding and stop it as well. It’s on merit’s of case and your arguments.
Even if you passport is impounded, you cannot be impounded. read 498a Survival Kit for reasons.
If Passport is impounded, you lawyer can make you a travel document and that would do for you to stay abroad. Make a lot of colored copies of your passport.
Give power of attorney to your relatives in india so they can fight case on your behalf.