Can possession holder use property in litigation ?

yes,yes

Dear Sir - Thanks for your reply, but I would appreciate if you please answer my two questions mentioned in my query, in details. 

You have every right to enjoy the property for lawful activities , .
you need not seek permission to use the property for lawful activities ,unless the terms of the injunction order directs otherwise. the law is well settled that the person in settled possession  cannot be evicted except through due process of law .therefore no authority is needed ,however you can refer to the following passage which contains the views of  Supreme Court.

"It is the settled possession or effective possession of a person without title which would entitle him to protect his possession even as against the true owner. The concept of settled possession and the right of the possessor to protect his possession against the owner has come to be settled by a catena of decisions. Illustratively, we may refer to Munshi Ram and Ors. Vs. Delhi Administration  (1968) 2 SCR 455, Puran Singh and Ors. Vs. The State of Punjab ,Rattan and Ors. Vs. State of Uttar Pradesh  (1977) 1 SCC 188. The authorities need not be multiplied. In Munshi Ram & Ors.'s case (supra), it was held that no one, including the true owner, has a right to dispossess the trespasser by force if the trespasser is in settled possession of the land and in such a case unless he is evicted in the due course of law, he is entitled to defend his possession even against the rightful owner. "

Mr Ramesh kasini its ur plot as mentiond above the condition will be u cant rent it u can use it for ur own purpose 

as to say about more information kindly elaborate the details.

 Hello Sir,

 
I need your suggestion.

 My in-laws have two sons and my in-laws are not alive.
My father-in-law owned a property (2 side by side homes) and my in-laws did not write any will.

My Co-sister verbally claims that every thing is hers and she gave both the houses on rent and has been enjoying rent
i did not bother about the property as at that time as my husband was doing well.
but now we are in huge laws and lot of debt (frankly, we don't have any income at all and i have my son still studying)
Now when i approached her (my co-sister) to take my share she provoked the tenant to file a case against us that he(tenant) is not entitled to vacate the house as he is paying rent properly on time.
And till the time the house is on rent we can’t make a case in the court for property dispute.

Sir, please help me by suggesting what i need to do

If there is no Will, then on what authority did she rent out both portions? The tenant cannot be held accountable since he probably has a written agreement with your co-sister. Find out if the tenant has an agreement and get a copy to show your lawyer.

 FIL dying intestate, all the legal heirs have equal,share in his property,file a partition suit,that is the only, then ur co brother will come in to terms.