Let the people who wear a blue, red and green shirt be denoted by b, r and g respectively. Restrictions on the seating arrangement:
1. Two b’s must not be together.
2. Three r’s must be together.
3. A ‘b’ and a ‘g’ must not be together.
4. A ‘g’ cannot sit on a chair numbered 2 or 9.
Case I: A person wearing a green shirt is sitting on chair numbered 1. It is only possible if another person wearing a green shirt sits on chair numbered 2, but this violates restriction number 4. Hence, this is also not possible.
Case II: A person wearing a blue shirt sits on chair numbered 1. The six seating arrangements that are possible are as follows.

Now, we see that the cases 4, 5 and 6 are just obtained by reversing the cases 1, 2 and 3 respectively. It can be concluded that in any possible seating arrangement, the chairs numbered 1 and 10 are always occupied by people wearing blue shirts. It is given that the number of people wearing a blue shirt is 3. Looking at the table given in the question, we observe that in each of the six arrangements two out of the three different people i.e. A, B and N always sit on chairs numbered 1 and 10.
Hence it can be concluded that the people who wear a blue shirt are A, B and N From the given table the person wearing a blue shirt can never sit on chairs numbered 2, 4, 7 and 9. So, (in arrangement I), A, B and N sitting on chairs numbered 1, 7 and 10 is inconsistent. Also, the people wearing red shirts sit on chairs numbered 2 and 9 and in all the possible arrangements five different people namely P, Q, M, Z and R are sitting on chairs numbered either 2 or 9. Therefore, P, Q, M, Z and R are wearing red shirts and K and L are wearing green shirts.
Option (1): A (Blue), P (Red), R (Red) and L (Green): Permissible
Option (2): N (Blue), Q (Red), K (Green) and Z (Red): Permissible
Option (3): K (Green), A (Blue), N (Blue) and Z (Red): Not Permissible
Option (4): B (Blue), L (Green), M (Red) and Q (Red): Permissible.