Hi Apu and welcome to the forum,
The things that scream out to me in this situation are mainly contained in your last paragraph. If C gave you an ultimatum, he obviously does not trust you, and has his own issues he needs to work on. In my opinion, you did the right thing for several reasons. Noone should be given ultimatums, especially when they claim to love someone. Having a control freak as a partner is not preferable! Also, the fact that you didn't really seem to have much of a problem walking away from C, tells us that regardless of your 'history', your feelings can't be very strong for him. From what you say, the only reason being away from C was difficult was because of HIS incessant calling and texting.
Ok, on to the deep stuff. For C to say "he would genuinely try his best to treat me right and we would never face the same issues that we had faced before" is madness. He has not worked on his own issues and even though he would probably fake it for a while, there is no possible way he will keep it up. Why? Because the same problems are there that were there before you broke up. Nothing has changed. He is simply pleading and begging and saying anything he can to get you back because he is hurting. Once he has you back, things will eventually go back to how they were.
Can I ask, other than 'we have a long history', why did you go back to C? Having a history is not a reason to get back with someone you were unhappy with. It's just the easy option,....not necessary the best.
All of this really boils down to how you feel. Do you love either of them? Think about that question before answering it. I'm talking about real love, not just the 'we've got history' kind of love. My opinion is this. Why do you need to make a choice when it is C that has a problem, not you. Unless you are 100% sure about how you truly feel, why not just remain friends with both of them and save the relationship for the time when you truly love someone?
I'll leave you with this thought. You've been bullied into a decision you are not really very happy with, and YOU are the one who is suffering by missing your friendship with N. It sounds like you are just making decisions based on the easiest option. 'C' calls the shots, you jump through the hoops,... that's how I see it. From what you say, I would consider remaining friends with both and nothing more.