Tenant refusing to vacate the rented room asking money to vacate

i made a agreement with guy for 24 months for a room 10 sq ft area n that guy will not asked the expenses for repair. guy agreed n done repair. After 2 years I came to know that police was hunting him in criminal case in 2006.I scared n asked him to vacate the room. but he refused n demanded me the Rs 50,000 for expenses of repair. I shocked n call my friend n talk to him he also shocked. he want to mother of guy n request her to tell your son to vacate the room . we surprised hearing that I should pay him 20-25 lakh Rs then we will vacate. now that guy doing his business there n disturbing n threatening my tenant who is doing his business in main premises n every day calling my friend n complaint him that I m sending gundas to kill him.I m in big tension ed can u advice please what I can do.