Tortured by Mother in Law for Money

Hello Sir, Wanted to seek advice what if my Mother in law is torturing me and my husband (son) for money. My husband is the only son and he had purchased a house in dadar and transferred on his mother name as a tribute for the sacrifices she had done for him. All the bills, Gas receipt are kept on her name. Still she is not satisfied. She tortured us like hell due to which we separated and stayed at my parents house. After 7 - 8 years she again asked us to consider her age and requested that she will not trouble us and will live in peace. Hence again we took a rented house, kept all my jewellery as mortgage and started staying together. After 6-7 months she again started with her nuisance and after a fight she went to her own house. Now she demands that we should pay her monthly 8000 as household expenses. She has filed a complaint against her son that he is not taking proper care of her. But as of now we are so heavily burdened with all the expenses, the rent, the interest we pay for the jewellery etc. I have 2 Kids who are very small and are studying. We have to even look after their expenses, education, tuition fees, bus fee, books, uniforms, medical expenses, doctor etc. We are hardly left out with 1000 in our pocket and bank statement says it all. In such circumstances, how am I supposed to pay her when i am left out with nothing. When we went to the police station we agreed that we can pay maximum 4000 and will take all the medical expense responsibility but she is not satisfied with that too. Can someone please help me out and advice me what can be done further, as I am feeling helpless that even after doing so much someone is just misusing the law and troubling us for monetory purpose.