Section 10: -The property of an intestate shall be divided among the heirs in class I of the Schedule in accordance with the following rules:—
Rule 3.— The heirs in the branch of each pre-deceased son or each pre-deceased daughter of the intestate shall take between them one share.
Rule 4.— The distribution of the share referred to in Rule 3—
(i) among the heirs in the branch of the pre-deceased son shall be so made that his widow (or widows together) and the surviving sons and daughters get equal portions, and the branch of his predeceased sons gets the same portion;
(ii) among the heirs in the branch of the pre-deceased daughter shall be so made that the surviving sons and daughters get equal portions.
So legally your brother's daughter and your mother shall also be entitled to get a share in the property, insurance, and compensation money.
but you cannot restrain her or force her
your mother may claim child custody but it is very tough to get custody of a child where the mother is alive and the father is dead. Mother is now the natural guardian but if the court thinks fit and your mother proved that the paramount welfare of the child is with your mother and not your sister in law then the court may grant custody of the child to your mother and not otherwise.
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