The Bihula festival is celebrated chiefly in the Bhagalpur region — option 1.

What it commemorates. The festival grows out of the folk legend of Bihula and Bala Lakhindar, and it is bound up with the worship of Manasa, the goddess of snakes. In the story, the merchant Chandradhar of Champa refuses to worship Manasa; in her anger she causes his sons to die of snakebite, and the youngest, Bala Lakhindar, dies on his wedding night. His bride Bihula refuses to accept his death, sets out on a raft down the river with his body, and by her devotion and endurance persuades the gods to restore him to life. The tale is recited and enacted in the Manjusha tradition of song and painting.

Manjusha art. This is one of the few Indian folk painting traditions that tells a continuous narrative, in a sequence of panels, using a restricted palette of pink, green and yellow and figures drawn in a distinctive angular style. It very nearly died out and has been revived through state support, and Bhagalpur’s Manjusha art has been given a Geographical Indication tag.

Why Bhagalpur. The ancient kingdom of Anga, whose capital Champa is identified with a site near modern Bhagalpur, is the setting of the legend, so the festival belongs to that district and its neighbours. Bhagalpur is also known as the Silk City for its Tussar weaving and lies on the Ganga beside the Vikramshila Gangetic Dolphin Sanctuary.

Hence, the answer is Bhagalpur.