What to do if someone elderly, a senior citizen in the family is not acting respectably?

Ours is a very weird problem. Its regarding my grandfather, he and my grandmother came to live with us because my grandmother was suffering from a disease for the past ten years. Now, my grandfather, his behavior is very abrupt and has always been so. He kept on using abusive words and showing unnecessary aggression towards my parents and my grandmother, ever since I can recall. He specifically used to target my mother regarding everything. Getting too loud and dominating everyone by using abusive words. We all used to live together till 2007, after that my parents and I shifted to city for our studies, that time my grandmother was healthy and the move was a conscious decision on all sides. Everything was fine for a long time. Then my parents decided that my grandparents should come and live with us, when my grandmother's health deteriorated quite a lot. I loved my grandmother and she was quite ill for a long time. They shifted here, everything was fine. But then gradually my grandfather started doing the similar sort of things again. Making big issues of basic domestic things, accusing my parents of trying to take his money, threatening to even having my father beaten, using abusive words for my mother and things, threatening to go to police against us. We are respectable people in our society, but he went out in the streets and told our neighbors that we are not treating him right and using very bad words for my parents infront of them. And we couldn't do anything. My father made it perfectly clear to him that we don't want a single penny from him, even I said that to him but just he stay peacefully which he doesn't. He feels everything that is done is a conspiracy against him. He even threatened once to kill my grandmother...which was more than I could take and I filed a complaint with Mahila Aayog, which my parents then asked me to close because they said, it will lead to unnecessary tension. My grandmother died a natural death last year. Now, time and again..something keeps on happening and he keeps on doing the same things. Like two days before, his TV was not working..he asked my father, and my father called someone to check it. He came and checked it and there was nothing much wrong with it, only the signal was off. But then, he calls our neighbors and tell them that we have specifically done something with a wrong intention...because of which TV is not working and to send someone to check it. Its so not right. Everyone is so tensed all the time because of this. My father, he never complains...just keep on doing whatever he says, however he says but nothing we do makes my grandfather happy. My parents way of dealing with it is just to let him do whatever he wants and don't mind the consequences much but its too much sometimes.If you could suggest something regarding how to deal with it, please do.