Whether it is your grand father's self acquired property? Your grand father allowed your uncle to construct a house on 1st floor,, was it through writing or through oral arrangement between father & son. Whether your grand father gifted 500Sft of land out of 1500Sft of the Plot through registered gift deed? What is the super-builtup area of the house? Since your grand father has died intestate, all his legal heirs viz., your grand mother and her children will have equal shares in the property except the 500 sft gifted to your uncle in the ground floor. Since 500sft belongs to your uncle (if he has derived the right through registered gift deed), any construction in that 500 sft portion, including 1st floor, if it is built on that 500sft, belongs to him. If there is separate khatha in his name for ground floor and/or first floor then he can sell the same. if your uncle has derived right over the portion of the property in terms of registered sale deed, then he will have every right to dispose off in any way he likes. In the alternative if he has constructed 1st floor on oral permission from your grand father, then your uncle can not sell the property. In that case the entire property (except the 500ft gifted to your uncle through regd. gift deed) can be sold and the proceeds can be distributed amongst the legal heirs giving a little higher percentage to your uncle to compensate the construction cost.