In the following case I do not see any reason why the daughter's son should be considered as the proper heir. The case is that of the daughter who has been sold by her father. The sons born of a daughter who has been sold by her sire for actual price, belong exclusively to their father. Such sons can never belong, even as daughter's sons, to their maternal grandfather on account of his having sold their mother for price and lost all his rights in or to her by that deed.
दौहित्रकेण धर्मेण नात्र पश्यामि कारणम्। विक्रीतासु हि ये पुत्रा भवन्ति पितुरेव ते॥