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Option B is correct.
Statement 1 is incorrect as there is a law restricting candidates from contesting in more than one constituency. The law is called The Representation of the People Act, 1951 and under Section 33(7), a person cannot contest from more than one Lok Sabha or Assembly constituency simultaneously.
Statement 2 is correct. Devi Lal, a former Deputy Prime Minister of India, contested the 1991 Lok Sabha election from three constituencies - Rohtak, Sirsa, and Medak in Andhra Pradesh.
Statement 3 is incorrect as there is no provision for the candidate`s party to bear the cost of bye-elections in case the candidate wins from multiple constituencies. If a candidate wins from multiple constituencies, he/she has to resign from all but one seat, and a bye-election will be held in the vacated seats. The candidate will have to bear the cost of the bye-elections.