Contractor is leaving house construction work incompleted

Contractor has come to the point to discontinue house construction work completely, he has agreed to complete the work till house plastering after that he shall leave . he had agreed to build house with total overall cost between 35 to 37 lakhs. he already holds the amount we had given around 28 lakhs, i don't think he has completed the house work for the amount that we had given, and i think he is holding more amount than the work he had completed. he hadn't given any written mode of payment for step wise work. He had told construction of water sump is not under his contract we had to pay. now before leaving he is demanding the amount 1 to 2 lakh for building water sump. we had approached an engineer for cost estimate of our house construction, he said the around 18 lakh would have been spent for the house he had constructed. he is holding around 5 to 8 lakhs extra amount. and now he is demanding 2 lakhs more for the sum he has constructed. what is the legal procedure to terminate contract with this type of contractor and is there any way to get back the extra amount he is holding.