Property of my grandfather

Dear Lawyers, I need advice for the below situation. Sorry for the long paragraph My grandfather died in March 2015. He had two wives, with 1st wife (who is my grandmother) he had 2 daughters(1966) and after few years he married another women and had a son (1978). However he was legally not divorced to his 1st wife until 1992. In around 1985 he brought a property in Hyderabad which was registered on his name in 1995. He took 1,50,000 from his 1st wife to buy a house however without any agreement and later in 1997/98 he sold the above property that was registered in 1995 to his 1st wife with an agreement in 100 Rs stamp paper. Due to mutual agreement and since my grand mother believed him she didn't register the property thinking that there won't be any issues in the future. My grand father died in March 2016, however he didn't write any will to anyone about the above said property but surprisingly his 2nd wife and son have started asking to distribute the property into 3 (himself and 2 daughters of 1st wife). My grandmother had the original stamp paper signed in 1997 which we got it validated and got the house registration done in the register office with the help of a lawyer. After that my grandma distributed the house to her 2 daughters this year 2016. 2nd wife and her son got to know about this and they are asking to distribute the property among three. Now they have sent a notice too to distribute it among 4 (2nd wife and her son, 1st wife's 2 daughters) else they would file a forgery case against the 2nd wife and the 2 daughters. Can you please advise if it is better to go ahead and deal the case in a court with the lawyer or do a settlement of dividing property into 3 (2 daughters and a son).