The correct answer is option 'B' - Second Administrative Reforms Commission.

Explanation:
The Second Administrative Reforms Commission (ARC) recommended the creation of a Local Body Ombudsman. Let's understand this recommendation and the role of the Second ARC in detail.

1. Second Administrative Reforms Commission (ARC):
The Second ARC was constituted by the Government of India in 2005 with the objective of suggesting measures to improve the functioning of the public administration system in India. It aimed to bring about administrative reforms to ensure effective governance and service delivery.

2. Mandate of the Second ARC:
The Second ARC was tasked with examining the organizational structure, functioning, and performance of the government machinery at various levels. It studied various aspects of governance, including public administration, ethics, corruption, and decentralization.

3. Recommendation of a Local Body Ombudsman:
One of the key recommendations made by the Second ARC was the creation of a Local Body Ombudsman. The Local Body Ombudsman would act as an independent authority to address grievances and complaints related to the functioning of local bodies such as municipalities, panchayats, and other decentralized institutions.

4. Need for a Local Body Ombudsman:
The Second ARC recognized the importance of local bodies in the governance structure and their role in providing essential services at the grassroots level. However, it also highlighted the need for accountability and transparency in the functioning of these bodies. The Local Body Ombudsman was proposed as a mechanism to address issues of corruption, maladministration, and non-performance in local bodies.

5. Role of the Local Body Ombudsman:
The Local Body Ombudsman would act as a watchdog and oversee the functioning of local bodies. It would receive complaints from citizens, investigate them, and take appropriate action to redress grievances. The Ombudsman would have the power to conduct inquiries, summon officials, and recommend disciplinary action against erring officials.

6. Implementation of the Recommendation:
The recommendation of the Local Body Ombudsman by the Second ARC was aimed at strengthening local governance and improving service delivery at the grassroots level. However, the implementation of this recommendation depends on the respective state governments, as local bodies are under their jurisdiction.

In conclusion, the Second Administrative Reforms Commission recommended the creation of a Local Body Ombudsman to address grievances and improve the functioning of local bodies. This recommendation aims to promote transparency, accountability, and effective governance at the grassroots level.