Land dispute issue

My grandfather has a small plot in the outskirts of Mumbai he bought it in 1991. while buying the land the land got registered with kul kayda kalam 43 .My grandfather did not go to the place since then.Since 2 yrs we have started going over on the land and removing the 7/12 extract and paying tax receipts which are still in my grandfather's name .My grandfather is old now and since 1 month we surveyed our land and started fencing .At that time a man comes claiming that it his his land and he showed us the kharidi khat as well as the fine he had to pay for not removing kul kayda. he also says that at that time there was not a law to remove kul kayda and this is the reason he does not have his name on 7/12 extract as well as his ferfar on the ferfar sheet of this land.but my grandfather says that it's not his sign and he has not sold the plot to him .That man is saying that he is ready to pay whatever expense we have done on that land ,but in return wants us to remove the application that we have given in talati office stating no ferfar should be done without olmy grandfather's consent. The man says he has registered sale deed but when last time we had gone to records registration office 2 yrs ago the record keeper over there gave us only the sale agreement of our land in the name of my grandfather.no one in the talati office knows about him ,he is just ssaying that he has put up a request in the pranth office and his request is pending just because of our application of the no ferfar given by USB.what should we do ??