Legal notice seeking recovery of damaged goods and health

So, we have a neighbor who is a supreme court advocate by profession and he has sent a legal notice out of the blue to my father seeking recovery of damaged goods and his health as well. He has stated multiple points that doesn't even make sense in reality. Like many off topic points about parking, stopping children from playing etc. He clearly stated that due to some events that has occurred between him and my father he was forced to sent us a legal notice, in reality he has never even talked to us, we never even had a fight, ever. His home was damaged a bit according to him when we did some aesthetic work in our home to which my father already had agreed to get it fixed unconditionally. Problem was of seepage which was never proven by the accuser that our work caused it, to which my father demolished our mini bathroom jus to be sure but no evidence of seepage was found. Accuser has drinking problem and he had sent multiple irrelevant whattsapp text to my father in the past . My family does a lots puja to which He has even directly accused us of witchcraft in the past which again he never could prove. What should be done with him? Now he seeks financial claims from us on points like how due to the seepage his home has foul smells due to which his health detoriated and how he was compelled to make repairs in his home more then 2 times and now wants us to pay the price for it. Should we reply to his legal notice with counters and fair points? And does this means that a case would certainly be filed against my father for no apparent reason?