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Shouting and waving people were in the bus station.

I think this should be the correct one, but I noticed that some people say this.

People shouting and waving were in the bus station.

Which one is correct? If both are correct, is there any grammatical rule that enable us to say both of them?

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"Shouting" and "waving" can either be verbs or adjectives. As a result, the first usage is better than the second. The difficulty with the second example stems from the need to reevaluate the sentence structure when "were" is encountered. "People shouting" seems like a perfectly ordinary noun-verb sequence at first glance, and since that is the most common structure in English it's easy to accept it. When you get to "were", however, it becomes obvious that this is the real verb, and the readjustment can be annoying.

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Neither of them are strictly incorrect, but one would usually use:

There were people shouting and waving at the bus station.

Or:

People who were shouting and waving were at the bus station.

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