Statement 2 is correct: Internal Complaints committee conducts only a preliminary inquiry into the complaints, and if there is enough substance to make out that there has been a case of harassment then the committee shall forward it to the police to register an FIR.
Police then will register an FIR under section 509 of the IPC and then the trial will be held in usual court and punishment is also decided by the court. So statement 1 is also correct.
The procedure is that: if any complaint is filed with the committee, it may call for a conciliation between the parties, but if conciliation fails it has to conduct the preliminary inquiry. In that inquiry, it finds anything that indicates of sexual harassment it may go to the next step of registering the FIR.