First of all your father in law have to pay capital gain tax on the capital gai arising to him on sale of such property. However , this tax can be saved if he invest as per the provisions of sec 54 or sec 54F. However, it is advisable that your father in law would invest as per sec 54 and then gift that property to you. If he pay cash to you then it doesnt qualify for exemption under sec 54 or 54F and he has to pay long term or short term capital gain tax as the case may be.
If he gifts that property to you then no tax apply to you because it ia gift from relative and also such transfer of property doesnt attract any capital gain tax on your father in law.
Therefore it is advisable that you should not take cash.
One more thing you are not going to pay tax on any cash received or any property received from your father in law as it is a gift from a realtive.