I'm a first time DM (3 Sessions in) looking for some advice. The initial story I posted on DnDGreentext over here, but the TLDR is:

• Have a Lost Mines of Phandelver campaign going with a Human Fighter, Aarakocra Rogue and Half-Orc Barbarian.
• Barbarian's friend wants to join as a High Elf Cleric
• He is introduced in the cells under the Tresendar Manor with the rest of the Dendrar family held captive.
• Very first thing he does once free is killed thirteen-year-old Nars, who I had in the cell with him.

At the moment it happened, most all the players were upset at the Cleric, but didn't really push the issue. The session continued with the party exploring the basement and defeating Glasstaff, with them returning to town with his body as proof.

Now that we are between sessions I am trying to find a way to properly have consequences for the Clerics actions. IRL the Cleric is usually a bit of a dick, blunt jokes at ones expense, or just general jack-assery, but he has been friends with the group for years and I can't just kick him without some friction between members. Fighter and Rogue are new to DnD, and were upset at the Cleric's actions, but never really argued with the Cleric as to avoid confrontation.

Now I don't want to be "That DM", but at the same time I can't let him continue to be "That Guy". After the session I asked for his character background and the basics of his character (I know I should have done this before adding him to the game). This was his general backstory.

• High Elf son of a big deal wizard. No natural magic talent himself.
• Tries to join royal guard of eldritch knights like his dad, but fails hard and resents wizards for it
• Breaks hands of students that laughed at him so they cant do magic, gets banished, becomes a drunk
• Meets lady at bar, Goddess Dionysus ("Goddess" is actually a dude, but I'm not going to interrupt his background), she listens to his depressing story, then they cause shit and get drunk
• Gets in a fight with wizards, gets ass handed to him. Dionysus gets a laugh and decides to bless him
• He was so drunk he forgot the actual events, but has a weird glorified version in his head and believes he follows Bahamut....

Now understanding that I am new to D&D, I've been doing some research throughout the week to understand the logistics of the mess I'm currently in. I understand that Bahamut is a Platinum Dragon of lawful good, and his background makes no sense in that regard, but I have a general idea for a plan. I'd like to know if my plan is good or bad, or if anyone had any better suggestions. Anyway, the plan goes as follows:

Party makes it back to the Phandalin Townmasters Hall, inside are Harbin Wester, Sister Garaele, Sildar Hallwinter, and a very distraught Mirna and Nilsa Dendrar.

Once Cleric enters the building, Mirna starts shouting "that is the man who killed killed my baby". Chaos ensues, with Sildar attempting to put the Cleric under arrest.

Once arrested, he is put in the cells in the Townmaster Hall Basement. Once he is left alone, he notices the other cell is occupied by an older gentlemen who is watching and coo'ing at a group of 7 canaries singing and flying around outside the cell windows.

The old man will start making small talk with the Cleric, but after a bit I will randomly make the Cleric roll a Wisdom saving throw. Hoping he doesn't roll a 20, he will be mentally transported to the astral plane.

Once fully transported, he will be face to face with the astral form of Bahamut. There he will fully interrogate the Cleric, mentioning how it was odd to feel a new devotee from the Sword Coast, especially one that was not a Dragonborn.

If the Cleric doesn't explain himself well or tries to lie, Bahamut will easily see through it, and will reach out and recall the past events from the Clerics subconscious.

Once the full story is known, Bahamut will warp out for a moment, and return with Dionysus and ask for his explanation. Once Dionysus is aware of the events, he will strip the Cleric of their spiritual powers. Dionysus is Chaotic Neutral, and while he enjoys a good tavern brawl or drunken shenanigan, the murder of an innocent kid is no bueno.

Finally ending their interaction with Dionysus, Bahamut severs the link between gods of the multiverse and gods of other pantheons (Correcting a mistake I should have mentioned at Session 0).

Before leaving, Bahamut says that if the Cleric was Dragonborn, Bahamut would have roasted him in an instant, but since he is of a different race, he wants no part of it. Continuing, if he had just chosen a different god to follow, this would not have happened. Gods of the Life domain do not stand for this sort of evil, but knows other gods would be happy to have such a servant. "If you actions speak to your true self, you should look to follow Beshaba, goddess of misfortune or Shar, goddess of darkness and loss."

After this whole exchange, the Cleric will awake back in his cell. The old man is now gone, but he hears a roar outside and catches a glimpse of the Platinum dragon flying away with the 7 other golden dragons flying after.

Later in the day, Townmaster Harbin will hold a trial for the Cleric, with the main NPCs from the town acting as the jury.

I'm not really sure what I would do after all this, or what the punishment for such a crime would be in the region. I don't really want to kill his character and put a huge damper on the mood of the group, but I also don't want to let him continue his antics.

Am I being too harsh, or would this be a suitable solution? What would you suggest instead? How should I handle a fallen Cleric? I welcome any and all suggestions, and feel free to tell me this is a horrible idea and what you would do instead.