Complex sentence: People start suspecting Balan of following the footsteps of his uncle into madness because Balan's uncle (Babu Namboodiri) fell mentally ill with a nightmare, and so did his uncle.
Split into simpler sentences: People start suspecting Balan following the footsteps of his uncle into madness. Because Balan's Uncle (Babu Namboodiri) fell mentally ill with a nightmare, So did his uncle.