Read the given statements and conclusions carefully. Assuming that the information given in the statements is true, even if it appears to be at variance with commonly known facts, decide which of the given conclusions logically follow(s) from the statements.
Statements:
I. All sacks are rugs.
II. All mugs are rugs.
III. All pugs are rugs.
Conclusions:
(1): Some pugs are sacks.
(II): Some mugs are pugs.

​Statements:
I. All sacks are rugs.
II. All mugs are rugs.
III. All pugs are rugs.
From the given statements Venn diagram will be: 

​Conclusions:
(1). Some pugs are sacks. (Not follows, There is no statement or inference connecting pugs to sacks. Both are independently inside the set rugs, but they may or may not overlap. So, this is not definitely true.)
(II). Some mugs are pugs. (Not follows, there’s no link between mugs and pugs. Just like before, both are part of the rugs set, but this doesn’t imply any intersection.)​

So, Neither conclusion I nor II follows.

Thus, correct option is (c).