The correct option is C Both the statements are correct
Atmospheric nitrogen cannot be used up directly by the plants as it is unreactive. It is fixed in the soil by certain bacteria, blue green algae, etc.
Rhizobium is a nitrogen fixing soil bacterium. It lives in the root nodules of the leguminous plants like pea, beans, etc symbiotically. Rhizobium fixes nitrogen for the legumes, and in return it gets shelter in the root nodules of the plants.