On-Deck Batter Interference

 
With a runner on first base (R1), the pitch to the batter is in the dirt, bounces off the catcher's shin guard, and rolls directly to the on-deck batter. The on-deck batter forgets that there is a runner on first base and that the ball is live, so the on-deck batter picks up the ball and tosses it to the catcher.
 
What does the umpire do in these two situations:
Situation #1: R1 was not attempting to steal, but instead was standing still about 10 feet from 1st base the entire time.
Situation #2: R1 was stealing on the pitch and safely made it to second base
 
A) The ball remains live
B) The ball is immediately dead when intentionally touched by the on-desk batter
C) R1 will remain or return to first base
D) R1 can remain at second base
E) R1 is out
 
Call
When the on-deck batter intentionally handles a live ball, the ball is immediately dead. If runners are not attempting to advance on the passed ball intentionally handled by the on-deck batter, then there is no penalty to the offensive team. If runners are attempting to advance when the on-deck batter intentionally handles a live ball, then the runner is declared out.