Suppose there is a processor read request for block X. If the block is found in L1 cache, then the data is read from L1 cache and returned to the processor. If the block is not found in the L1 cache, but present in the L2 cache, then the cache block is moved from the L2 cache to the L1 cache. If this causes a block to be evicted from L1, the evicted block is then placed into L2. This is the only way L2 gets populated. Here, L2 behaves like a victim cache. If the block is not found in either L1 or L2, then it is fetched from main memory and placed just in L1 and not in L2.
So B is correct answer.