The correct option is B P R S Q
The structure of sentences that begin with 'hardly' are: 'hardly had + clause + when + clause.
From the parts of the sentence, P follows the first part as 'when' indicates the beginning of a new clause.
R follows P as the relative pronoun 'who' in "who had come..." refers to the noun "people". The relative pronoun immediately follows the noun that it relates to.
S follows R as the words "from the lounge" indicate the place the people came out from.
Q follows S as the words "waved and cheered" indicate the action performed by the people who had come from the lounge.
Hence the correct sequence is PRSQ, as mentioned in D.
Options A, B and C are incorrect as they do not contain the logical sequence.