The correct answer is option 'B', which means B bears the risk in this situation. Let's analyze why B bears the risk in detail.

When A sold the bicycle to B, it was agreed upon that B would pay Rs. 500 and take delivery of the bicycle at a later time. This means that the ownership and risk of the bicycle would be transferred to B once the payment is made. However, in this case, B has only paid Rs. 500 and has not taken delivery of the bicycle yet.

Now, if the bicycle is lost during the period between the payment and the delivery, B bears the risk because the ownership of the bicycle has already been transferred to B. A has fulfilled their part of the agreement by selling the bicycle to B and receiving partial payment. Since B has not taken delivery of the bicycle, it is B's responsibility to bear the risk of any loss or damage that occurs during this period.

To further clarify this, let's consider the principles of risk and ownership in a sale agreement:

1. Transfer of Ownership: When A sold the bicycle to B, the ownership of the bicycle was transferred from A to B. This means that B becomes the legal owner of the bicycle once the sale agreement is made, regardless of whether B has taken delivery or not.

2. Risk of Loss: The risk of loss or damage to the bicycle is generally transferred along with the ownership. In this case, since the ownership of the bicycle has been transferred to B, the risk of loss also transfers to B.

3. Delivery: Taking delivery of the bicycle is a separate action from the transfer of ownership. It is the responsibility of B to take delivery of the bicycle within a reasonable time after making the payment. Until B takes delivery, the risk of loss or damage remains with B.

Based on these principles, it is clear that B bears the risk in this situation because the ownership of the bicycle has already been transferred to B, even though B has not taken delivery yet. Therefore, option 'B' is the correct answer.