@Author
See my answers below:
Q.1) if it is legally acceptable to have 2 wives in Hindu law
A1.) No. It is called "Bigamy" and punishable at the option of the aggrieved spouse under IPC, HMA etc.
Q2.) What if a govt employee (who is already married) gets engaged with his brother's wife (of course the brother has paased away in an accident and this seems to be the only option left behind).
A2.) If the marrying male is already married, and the first wife is ready to accept the widow then such marriage may not lead to any problems. However, if the first wife at a later date but within reasonable span of time, files for bigamy, the male could be punished instantly.
Q3.) how he can be father of the kids (officially) of his brother's wife
A3.) After formally getting married, the sirname of the father gets automatically attached. If you wish the name of the father to be updated in the documents then you can apply copies of re-marriage and supporting relevant documents and get those documents re-issued from respective deptt.
Q4.) if the lady decide to get married to someone (who is in a similar situation) knowing the fact she is socially engaged (haath rupaiya) with with his husband's brother? does she need to get a divorce ?
A4.) Upon the death of the spouse, there is no need for any official decree from court for divorce. Just keep the death certificate for ready reference if requried at any point of time.
In totality I suggest that if your first wife is ready to accept the second wife, then there is no issue ans you can go ahead to help the widow of your brother. Best known example of twin wives is the famous actor Dharmenra. Till the date the two wives don't fight, you are save else within a reasonable time, any of the wife can file a criminal case against you under bigamy and hindu marriage act.
//peace
/Saurabh..V