According to Article 75 of the Indian Constitution, the President appoints the Prime Minister.
Article 78 states that the Prime Minister communicates all decisions made by the council of members to the President. Hence, Option 1 is correct.
The President can also refer to issues for the consideration of the council of members.
The executive branch is also the central advisor to the President of India and the head of the Council of Ministers.
The Prime Minister can be a representative of either of the two houses in the Indian Parliament, Lok Sabha and Rajya Sabha, however, he must be a representative of an ideological group or an alliance with a greater stake in Lok Sabha.