Tenant rights in case of Redevelopment

We have a standalone building in which 5 flats are occupied by us (Owners) and one flat is occupied by tenant. But in case of this tenant, there is absolutely no paperwork with regards to Leave & License Agreement, etc. that can prove his tenancy. Our original tenants were his Grandfather & Grandmother who had moved here some 45 years back and are now deceased. The original owner of our building too is no more and the ownership has been transferred to the Heir's. Now we are planning to go for redevelopment. But the tenant is demanding his existing area FREE OF COST & the extra area at construction cost, which is not acceptable to us as well as the builder. I wanted to know what our rights are as Owners of the building, in this case? and what are the options to deal with this situation. We have already given the tenant 2 options: 1) He shifts to a alternate accommodation, part of the rent for which will be borne by us. After construction gets completed, he moves in back as a tenant under a new L&L agreement with us. 2) We have offered him the existing area that he occupies at construction cost & extra area at market rate as decided by the developer.