Exp) Option b is the correct answer.

The Union Public Service Commission (UPSC) is the central recruiting agency in India. It is an independent constitutional body in the sense that it has been directly created by the Constitution.

Statement 1 is correct: The President can remove the chairman or any other member of UPSC from the office under the following circumstances: (a) If he is adjudged an insolvent (that is, has gone bankrupt); (b) If he engages, during his term of office, in any paid employment outside the duties of his office; (c) If he is, in the opinion of the president, unfit to continue in office by reason of infirmity of mind or body.

In all the above three cases, It is not necessary to refer the case by the President to the Supreme Court for an enquiry. However, when the president removes the chairman or any other member of UPSC for misbehaviour, he has to refer the matter to the Supreme Court for an enquiry.

Statement 2 is correct: If the Supreme Court, after the enquiry, upholds the cause of removal and advises so, the president can remove the chairman or a member. Under the provisions of the Constitution, the advice tendered by the Supreme Court in this regard is binding on the president. During the course of enquiry by the Supreme Court, the president can suspend the chairman or the member of UPSC.

Statement 3 is incorrect: There is considerable difference between the removal process and grounds of removal. CAG can be removed by the president on same grounds and in the same manner as a judge of the Supreme Court (not same as members of UPSC). He can be removed by the president on the basis of a resolution passed to that effect by both the Houses of Parliament with special majority, either on the ground of proved misbehaviour or incapacity. Whereas, in case of UPSC, there is no involvement of Parliament.