Not far from the school there was a garden,--------- owner s

A

因为后面seated 不是谓语, 是非谓语动词（过去分词）, 用its owner 和 seated in it playing chess with his little grandson every afternoon构成【独立主格结构】
比较：
Not far from the school there was a garden, 【whose】 owner 【was seated 】in it playing chess with his little grandson every afternoon。