The sale dwed cannot be cancelled unless fraud or cheating arw proved. Mutation is nothing and cannot supplant sale deed. It only means something for the purposes of paying land revenue.

Regards 

1. The matter can be settled /decided ONLY by filing a Civil Suit in the local Civil Court, and making the Tahsil office and the Survey dept., and the Seller, as parties to the dispute.

2. You will have to obtain court decree and directions to the Tahsil office, for setting right the land records.

I presume your grandfather purchased lamd  by registered sale deed 

2) seller cannot cancel sale deed unilaterally 

3) your grand father should file declaratory suit that he is. absolute owner of 32 decimal of land 

See without order of court deed cannot be cancelled  secondly even if mutation is not done there is valid title of grand father over the property vide sale deed so they cannot take back that property. 

You need to check whether there is any order of the court for cancellation of the sale deed

If you have the possession of the land till date than you can file for adverse possession and produce other legal documents whatever you have as of now.

If you have valid sale deed in your hand then move for the mutation before the competent court today if not then how you can say that land belong to you.

No way, non mutation dose not effect ownership. Mutation Entries On Revenue Records Do Not Confer Title. Ownership will prove by sale deed and possession.

You apply for mutation and sale deed can cancel by court order only. Also apply to correct survey.

you can file a case of declaration declaring that your grand father is the owner of the said property and seeking stay that the seller be restrained from interferring in your peaceful possession.

1. Sale deed can be cancelled only by the civil court, not by revenue authorities.

2. If sale deed has been cancelled then there must be an order passed by the court.

3. In this scenario you can apply for a fresh survey of the land and thereafter a suit for declaration of title may be filed.

Your grandfather (if living) or his legal heirs/successors in interest can file a suit for declaring their title to the entire property they have purchased by registered sale deed.

Please remember that the land revenue records are not the title document.

Hence if there is a claim dud to non-mutation of the property to his name, it is not legally valid or maintainable.

You  can challenge their claim in court of law as suggested.

You should apply for mutation of land on basis of second sale deed of grandfather.

If revenue department refuse to do mutation of property then you have file suit for declaration of ownership of property on ground of sales deed of 1968.