If he refuses then you can sell your legally partitioned share to any other buyer

FIL  can issue notice to brother offering to match offer received by him for selling his share of property 

2) 

The conditions necessary for invoking section 22 of the Hindu Succession Act are as follows:-

1) An interest in any immovable property of an intestate or in any business devolves upon two or more heirs specified in clause I of the schedule.

2) Any one of such heirs proposes to transfer his or her interest in the property or business.

3) In that case, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.

3) it has been held that the right of pre-emption can be exercised even after the sale by the co-sharer and the sale is only voidable at the instance of the other co-sharer who has denied the preferential right

Co-owner has every right to sale his share to a stranger subject to following. 

In case of dwelling house belonging to an undivided family, the stranger  shall not have any right to joint possession or other common or part enjoyment of the house. 

The property not being in intestate succession  you shall have no preferential right to acquire the share of other co-owner.

1.  An "undivided property" CANNOT be sold to strangers, BUT can be sold to co-owners only.

2.  Undivided Property, has to be first duly partitioned deed following by demarcation and only then the partitioned property can be sold to ANYBODY, further PROVIDED that there are separate entrances & service amenities.

3.  IF the undivided property cannot be partitioned physically & on record, THEN partition proceedings are null & void, BUT the joint-owner can sell to other co-joint-owners.

See you cannot force him to sale same to you or your Father in Law, see to stop him from selling and getting some time a suit for partition of property can be filed with interim stay application so that in case he is not able to sale instantly he can sale same to you.

Your FIL has couple of options:

1) Let him issue notice to his brother offering to purchase the property on par with the offer of outsider.

If same is denied or not considered he can initiate proceedings.

2) He has support of provisions of Hindu Succession Act as preferential rights etc.

Sum and substance is, after exhausting the privileges conferred on other co-owner, the other co-owner can proceed. Here case on hand, your FIL is interested, as such, first preference has to be  given to him.

1. After the partition by metes and bounds the co sheerer can sell his divided property any party including stranger purchaser provided the same is not a family dwelling unit.

So practically your FIL can not stop him  if there is two separate unit and separate points of entry and exit.

So if the birther of the FIL refuses to sell this share to him your father in law does not have much remedy. 

2 However since this case the property is physically partitioned as yet, your FIL can file a suit for partition and injunction.

4. In the suit your FIL can propose to buy his share.

5. Refer to section 3 & 4 of the Partition Act.

Strange dose not have right to reside in dwelling house without partition. So, dont partition, and co owner has pre emption right purchase. File civil suit for injuction to sell to third party and enforcement of pre emptive.

There is no law which provides that co-sharer must only sell his share to another co-sharer. Thus strangers/outsiders can purchase shares even in a dwelling house. 

1. Your FIL's brother will certainly file a partition suit for deviding his share of the property withmetes and bounds.

2. While opposing the said partition suit, your FIL shall have to submit hat his brother is attepmting to sell his share to a third party without preempting it i.e. without offering to sell it to him which should be restrained.

3. Your father in law can offer to pay for the share of his brother while contesting the said partition suit.

4. If his brother sells his share even after such submision of your FIL later on without preemption,  he can file a suit praying for cancellation of the registration of the said salw made to the third party.

There is no such thing that your father in law can claim first refusal.

His brother's share in the property can be sold to anyone of his choice, which cannot be disputed.

If he refuses the offer made to buy his share in the proeprty then you have nothing to do on it.

However to put pressure on him, a suit can be filed on this,  in addition to his partition suit when your father in law is refusing to partition the property.

The delay in disposal of the suits will mount pressure on him by which he may come come down to your conditions, owing to his urgency for the money.

1. As per the information mentioned in the present query, makes it clear that the nature of the property is ancestral.
2. Your father in law and in laws brother are having equal share in it by virtue of law of inheritance.
3. But, as this is the dwelling house, and he wants to sell his portion, he can’t sell it to any stranger at first instance.
4. He would have to offer to your father in law at market rate and if your father in law denies then you can’t stop him.
5. But, if he doesn’t give first offer to your father in law at market rate then you can move before the court of law to get injunction against him from selling.