My query is : Is it necessary that the flat needs to be in the name of the elder sons wife's name?
The maternal grandfather before dying made a will or settlement in favor of his wife and two children alone. Since grandmother passed away in 1987, only her share n the property can be claimed by all sons and daughters, thus it shall be divided into 3 parts and A's legal heirs shall be entitled to 2/3 rd of the property as C has executed a registered release deed in favor of deceased A during his life time. The other siblings can claim a share out of your mother's intestate share in the property.
Can all the other siblings claim right
You may refer the above answer.
Also the 3rd son who is staying I'm the house will create problems for partition as he has been staying in the same house and doesn't have any other place.
If he is creating problem then he can be handled legally only and not by any comprise.
Please advice how will all the siblings get heir rights
All the siblings cannot claim any right in the 2/3 property inherited by legal heirs of deceased A. The other siblings can claim a right to a share in the citizen A's property.