The correct answer is 'B' i.e. 'error lies in this part of the sentence.' Key Points In part B of the sentence, the usage of 'looking' is incorrect Instead of it use 'was looking' Let's see the structure of the sentence:- 'That' is a relative pronoun which generally makes a clause. In a clause, there must be a subject and a predicate. In this 'that clause' the subject is 'the principal' and the verb is missing in part B because if we write only 'looking' then it will become a gerund which we don't want. Hence, we need to write an auxiliary verb since this is a past indefinite tense as we can stipulate it from the main clause i.e. 'It seemed to me' so usage of 'was looking' should be there. So the correct sentence is- It seemed to me that the principal of the school was looking at me in a rather suspicious manner.