Owner blames me for termite damage not refund deposit demand more money threaten action if not given

Dear Sir, Was staying in a flat in Hyd (Aug19-Apr21). No rent agreement made. 13K rent & a 2-mth deposit verbally agreed. Owner in US & building managed by Secretary (Owner's friend) who stays in the building. Have no pending dues on rent, maintenance, electricity, etc. All transfers were on time & done online. Full building termite-infested for years but no one informed us. We noted minor pest activity during lockdown (June 20) & upon inquiry got to know that a severe problem exists & everyone including Owner & Secretary knew. In July we did pest control on infested areas through a local vendor & as suggested got Terminator Spray to use as & when needed. Subsequently, we got transferred to B'lore and moved out on 8th April. Once we vacated, the owner informed us that he had made repairs/replaced a few cupboards, door frames, etc. some of which were of the time even before we moved in. He says he has spent 20k for the same & by holding us responsible is not only withholding our security deposit amount (22K) but also is now (2 months after we vacated) demanding 25k more claiming as compensation for his initial investment for interiors. If we fail to pay the amount we are being threatened with action against us. Please help & suggest what best can we do in case this moves ahead since presently I am in Bangalore and if any legal/police action is registered at Hyderabad will cause severe hardship not only due to the current pandemic (Covid) but also a considerable drain on my time, effort & financials. Thanks.