The correct answer is (b) 32.
The number of students passing with distinction is 5% of 80 students, which is 4 students. The number of students passing with first division is 10% of 80 students, which is 8 students. The number of students passing with second division is 15% of 80 students, which is 12 students. The number of students passing with third division is 25% of 80 students, which is 20 students. The total number of students passing is 4 + 8 + 12 + 20 = 44 students. Therefore, the number of students failing is 80 – 44 = 36 students.
Option (a) is incorrect because it is the number of students passing with distinction. Option (c) is incorrect because it is the number of students passing with first division. Option (d) is incorrect because it is the number of students passing with second division.