As per Section 33(7) of the Representation of Peoples act, 1951, one candidate can contest from a maximum of two constituencies (more constituencies were allowed until 1996 when the RPA was amended to set the cap at two constituencies). Hence, statement 1 is not correct.
In 1991, Haryana deputy chief minister Devi Lal contested three Lok Sabha seats: Sikar, Rohtak and Ferozepur — as well as the Ghirai assembly seat. He lost them all. Hence, statement 2 is correct.
The costs of the by-elections in such cases are borne by the Election Commission Of India. Hence, statement 3 is not correct.