What to do if mandya municipality did not paid us the amount

we have a property in muncipal limit of mandya, karnataka. Local people are using some portion of land as road. 12 years back, mandya muncipality had an informal talk with us for using land for road and agreed to pay at 275 per sq.ft. for the land to be utilized. They agreed to use 3300 sq ft of land and agreed to pay 9 Lakhs. Later they paid only partial amount of 7.5 Lakhs through cheque. Upon repeated requests by us, they didnt pay the remaining 1.5 Lakhs till now. There was no formal agreement or registration is done for the used land. Now muncipality asking us to do the registration of the used land to their name by giving the balance of 1.5Lakhs. Now we are demanding the compensation as per the latest market value (3000/sq.ft) which is as per the latest land aquisition act. It comes around 1 crore for the 3300 sq. ft land used. Please suggest whether there is a legal provision for this.