Raziwaqar Sir, you are mistaken here. Miss Anam is correct. I am Writing the exact line written on the question paper: "Rewrite the following dialogue, written in direct speech, in a paragraph form". Here the phrase 'written in direct' speech is what's creating the confusion. But since the comma is after the word 'dialogue', this phrase is merely describing this word, and its not the command of the examiner. If examiner wanted you to write in direct speech then he should have used the command 'write' instead of 'written', which is a description.

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