After husband's death who is the legal heir of this property?
The legal heirs are his wife, children and his mother.
The papers of house are forcefully taken by brother in law. What action can be taken against him?
What papers he has taken away?, is it the property title documents?, if so, then your sister can lodge a criminal complaint against him for stealing the property title documents and seek their help to retrieve them.
What is the procedure to transfer this property to my sister?
The entire property cannot be transferred on her name, she can get the share of properties of her and her children transferred on her name b producing the death certificate and lgl heir ship certificate before the land revenue department/Tahsildar for this purpose.
There is a loan on house of 1.5 lakhs which is still to be paid. The bank has not insured my sister's husband who took the loan. What legal action can be taken on bank ?
No action can be take agaisnt the bank for not insuring because it is not mandatory to insure for taking loan and moreover it was your brother in law who should have taken an insurance policy and not the bank's duty .
Who will get the money of life insurance policy?
Whoever has been nominated as nominee shall get the insurance death claim amount.
Is her mother in law also legal heir of this property as well as life insurance amount.
Yes.
What legal action can be taken against mother in law , brothers in law and their wives for the torture they are doing?
Your sister can file a DV case against all of them and also file a criminal complaint against them for these tortures.
She lives in gujarat and i stay in pune ,maharashtra.Can I file legal complaint in pune jurisdiction?
NO