Your ordering is not correct; if you look at your null values, it's sorting a grade of 3 before grades of 4, 6, and 7. Your order by clause doesn't makes sense and needs to be changed to this:

select 
    case when g.grade > 7 then s.name else NULL end,
    g.grade, 
    s.marks 
from students s 
    inner join grades g 
    on s.marks between g.min_mark and g.max_mark 
order by g.grade desc, s.name asc;

Don't overcomplicate.