A student puts a drop of reaction mixture of a saponification reaction first on a blue litmus paper and then on a red litmus paper. He may observe that: 

The process of making soap through a reaction between a metallic alkali and a fat or oil is known as saponification. Alcohol and salt of carboxylic acid are produced by the hydrolysis of an ester in either acidic or basic circumstances.
We also know that litmus paper, a type of filter paper that has been dyed with a water-soluble substance and can be used as a pH indicator, is a type of filter paper. Accordingly, blue litmus paper turns red in acidic conditions, and red under basic conditions, on litmus paper.

A saponification mixture contains a base hydrolyzing long chain fatty acids. We also know that blue litmus is used to detect acidity and red litmus is used to detect basicity.

When a saponification mixture, an alkaline substance is tested on blue litmus paper no change occurs. But, when tested in red litmus, its color is changed to blue.

Hence, option C is correct.