1. The husband of a deceased daughter has no rights over father-in-laws property.
2. As per Law of the land if the property of the father-in-law was his self acquired property then this property shall devolve to all his "legal heir" if he died intestate.
3. If he doesn’t make a Will of shares, then, upon his death, his property will be divided amongst his Class 1 heirs only.
For clarity as to who are his Class 1 heirs the below short explanations are self sufficient;
SONS – all children of a pre-deceased son
DAUGHTERS - all children of a pre-deceased daughter
WIDOW – widowed daughter in law
MOTHER - all children of a pre-deceased grandson
4. Here the father (husband of deceased daughter) is alive that is son–in-law is alive not a son of deceased father but son-in-law which makes this query more interesting!
So in this case the grandson i.e. all son / daughter of your deceased wife who is daughter of a deceased father-in-law is/are legal heir even if his "Father i.e. son-in-law" is alive is my opinion as he i.e. son-in-law having no rights but deceased daughters son / daughter are considered children under Class 1 heirs.
However, I like to stand corrected in this opinion if any.