Whether your father in law married his second wife after the death f his first wife, if so,then she is a legally wedded wife, however what you say about her pregnancy cannot be legally maintainable because he husband was alive during the time of her pregnancy and she can very well say that he only impregnated her, until and unless you have medical records or certificate to prove that he was incapacitated for the conjugal relationship at the time when she conceived a baby in her womb and also may seek for DNA test too.But that would more time consuming and you may not be successful to prove that, resulting into losing entire thing including the opportunity to compromise the bargain in the property sharing.
1) How will the property both movable and immovable be divided?
As of now, the intestate property that belonged to your father will devolve equally on all his legal heirs including the child which is still considered his legitimate child and a proper legal heir.
2) Can my wife legally proceed against the second wife for her shameful act of conceiving a
child from another person?
She has to prove that with the help of medical certificate evidence of her father on the lines discussed by me in the above paragraph.
3) Most of the property belonged to my wife's mother(first wife). Will that property come to my wife?
The property belonged to your wife's mother shall go exclusively to your wife being the only legal heir of her deceased mother, but her father's property shall be shared by others also.